Edward Miliband: My hon. Friend has raised an important point. In the pre-Budget report, the Chancellor suggested looking into whether the issue of tuitionfees could be considered in relation to volunteering opportunities. The young volunteers to whom I talk say that they get a huge amount out of volunteering for themselves and their future career, and also get satisfaction from it. Part of the job of v and other organisations is to spread that message more widely, including through young people themselves.

Andy Reed: My hon. Friend will be aware that the voluntary sector is particularly well represented in the sports sector, as26 per cent. of all volunteers are involved in sport. Will he ensure that they fully understand the implications of the compact? He is welcome to attend a meeting tomorrow of a national organisation that represents all those people, of which I am chair. Will he bring the message of hope, which is that volunteering, particularly in 2012, will drive forward our agenda, particularly for young people, who increasingly get involved in volunteering, especially in sport? That is the positive message that I hope he will bring to the meeting.

John Prescott: We fully accept our responsibility for the good government of this country. We have got millions of people back to work, we have reduced waiting lists and put more investment into education and health, so we are happy to comparethat record with the 18 years under the right hon. Gentleman's Government. We have a very good record, which I ask him to consider. It is a bit of a cheek for the right hon. Gentleman to criticise us, bearing in mind that he was a member of that disastrous Government, who brought terrible consequences for our people and the country's economy. I am quite prepared to make a comparison. Let the right hon. Gentleman keep on making the speeches; quite frankly, that is just about where his ability lies. I believe that he is now the man responsible for getting the votes back for his party in Yorkshire and Humberside. There were no gains when he was leading the Tory party and if he has to get the level of support back to that in 1992, I am bound to tell him that it will take 40 years. That sounds right. Keep the night-time job and the pay, but quite frankly, he will not be back in government.

John Prescott: Discussions have taken place on an individual basis with my right hon. Friend the Secretary of State as well as within the Cabinet Committee system and, indeed, the Cabinet. With specific reference to early years and schools, I think that our record speaks for itself. We have abolished classes of more than 30 for primary-aged pupils; we are on track to deliver 3,500 Sure Start centres for the under-fives by 2010; we are extending flexible, free part-time nursery care for three and four-year olds up to 15 hours a week, also by 2010; and we have invested £40 million for extra classrooms and extensions to ensure that no child of five, six or seven will be in a class of 30. Thanks to £35 million investment, we have ended the scandal of primary schools having to rely on outside toilets, which characterised their state under the previous Administration.

Tony Blair: I will tell the right hon. Gentleman what I believe is in the national interest: that we continue with a strong economy, the highest levels of employment and the lowest levels of unemployment, that we continue with our policies for the health service, which have seen waiting lists fall by 400,000, that we continue with our policies on education, which have seen the best school results ever, and that we continue to reduce crimeand do not, as the right hon. Gentleman's party did, increase it.

Tony Blair: First, let me say that I am of course very sorry, and I extend my sympathy to any of the hon. Gentleman's constituents who have lost, or are likely to lose, their jobs. I can assure him that the local Jobcentre Plus and the Government will do everything that we can, as we have done in other situations, to put a support mechanism in place to ensure that they get alternative employment. I have to say, however, that Chesterfield's economy, like that of the rest of the country, is infinitely stronger than it was in 1997: employment is up and unemployment is down. Yes, it is true that there have been a quarter of a per cent. rises in interest rates recently, but the hon. Gentleman's constituents will remember when interest rates were10 per cent. for four years, and 15 per cent. for months at a time. One reason why we can confidently expect people to get alternative employment is precisely the strength of the economy.

Eddie McGrady: Following the report of the Police Ombudsman for Northern Ireland on state collusion and murder in Northern Ireland, has the Prime Minister been made aware of the statement last Sunday by a former assistant chief constable, who said that MI5 had made, and continued to make, payments out of its own funding to informers who were involved in at least10 murders? Will the Prime Minister acknowledge that the ombudsman's report on that collusion dealt only with part of Belfast city and one unit of the loyalist paramilitary organisation, and that much, much more was happening throughout Northern Ireland? Does he not think that this warrants a statement to the House—

Tony Blair: First of all, let me explain to the hon. Gentleman that there is no question —[Interruption.] The right hon. Gentleman; my apologies. There is no question of our agreeing to anything behind closed doors with the German presidency, or anyone else. Last year we agreed that we would take stock following the French and Dutch no votes in the referendums. The German presidency is therefore obliged to take forward proposals for the Council later this year. Of course we are in discussions with the German Government as to what those proposals will be; it would be bizarre if we said, "We're not prepared to talk to you about it." Let us wait and see what the German presidency comes up with. Our position on the referendum and the constitutional treaty remains unchanged. But I really do believe, particularly in the light of the strong bilateral relationship that we have the German Government today, and of the importance of Europe to this country, that it would be a wonderful thing for the politics of this country if people such as the right hon. Gentleman could liberate themselves from this absurd and antiquated view of Europe.

David Borrow: Last year the Royal Society for the Protection of Birds purchased 170 hectares of land at Hesketh Outmarsh in the Ribble estuary in my constituency—land that was rescued from the sea 20 years ago. In a few months' time, breaches will be made in the sea wall to allow that land to return to salt marsh, which will allow a nature reserve to develop. More importantly, it will ensurethat the coast of Lancashire is protected from flooding as a result of climate change. Will my right hon.Friend congratulate the RSPB on that initiative —[ Interruption. ]

Bernard Jenkin: In 1998, the Prime Minister was warned by President Clinton's Secretary of State not to agree at St. Malo an autonomous defence capability for the EU that would duplicate and compete with NATO. Is he aware that the NATO Secretary-General warned yesterday that the EU and NATO would be unable to work together in a global crisis and that the distance between themis "astounding", or does the Secretary-General—a Dutchman, incidentally—just believe in an antiquated and absurd view of Europe?

Andrew Rosindell: I beg to move,
	That leave be given to bring in a Bill to amend the law so as to require traffic authorities to cause traffic signs to be placed on or near roads for the purpose of indicating the location of historic county, town and village boundaries; to require the Ordnance Survey of Great Britain and Northern Ireland to mark the boundaries of the historic counties, towns and villages on its maps; and for connected purposes.
	I pay tribute to my hon. Friend the Member for Uxbridge (Mr. Randall) who presented a similar Bill and, indeed, inspired the one that I present today. I thank the Association of British Counties, a society dedicated to promoting awareness of the 86 historic counties of Great Britain, which has campaigned tirelessly for their recognition through proper signage denoting historic county boundaries.
	My Bill extends the principle of giving visible recognition to historic counties by including towns and villages, whose identity is so often lost when a district, borough or county council ignores the correct name of actual places and instead chooses to impose the name of the administrative authority, causing confusion and removing the sense of local identity that is so important to communities up and down our land.
	Restoring identity to counties, towns and villages, along with pride and local patriotism in an historical context, is immensely important. I believe that we must stop the erosion of true local identities and restore the pride that people naturally feel in belonging to a county, town or village that in so many cases has already been lost.
	My town of Romford is probably one of the best examples. As an historic Essex market town, there are indications of our historical links with Essex all over Romford—together with the constituencies of Hornchurch and Upminster, which today form the administrative authority of the London borough of Havering. That is a typical construct of the local government reforms of the 1960s. As I travel back after a busy week at Westminster to my home town of Romford, which lies within my home county of Essex, I enter the boundaries of Essex and Romford, but nowhere do I see a road sign welcoming me to either place. They have been written off the map by a dreadful local government culture that seems to recognise only the often made-up and artificial names of administrative boroughs or districts. That cannot be allowed to continue.
	I was born in a place called Rush Green, a community within Romford but divided by a nonsensical local government boundary that splits one side of the area from the other, leaving half of it in Havering and the other in Barking and Dagenham. Only recently new signs were erected to welcome people to the area. You have guessed it, Mr. Speaker, down came the signs that indicated that one was entering Rush Green. They were replaced by signs saying, "Welcome to Havering". I am aware that hon. Members have many such examples of the traditional boundaries of their counties, towns and villages being ignored by blinkered town hall bureaucrats who seem interested in promoting only the name of their administrative authority, even if it is a totally artificial name with no historic meaning.
	To see an Essex sign, which should correctly be placed at the River Lea near Stratford in east London, I have to travel many miles, through a host of traditional Essex towns and communities, until I reach the other side of motorway 25, where Essex county council has erected "Essex" signs as one enters Brentwood. I and many of my constituents, who are proud of our Essex heritage and roots, find that deeply offensive. County councils, London boroughs, elected mayors and transport authorities must never be allowed to strip people of their local identities. The law must be changed and that is what my Bill seeks to do.
	The importance of historic villages, towns and counties is much greater than just local government. They are sources of identity and objects of affection for many people and I sincerely hope that this significant part of our British identity can be secured for future generations. However, to achieve that, we must mandate local authorities to install signage indicating actual counties, towns and villages and giving their names precedence over the name ofthe administrative council itself. We must divorce administrative, regional, electoral and ward boundaries from true places that have existed for hundreds of years. I have even seen one local council—a Labour one—erecting a sign that indicates the made-up name of an electoral ward, rather than the actual name of the community, which has existed for centuries. How damaging to our identity such actions can be.
	I have lived all my life in the community of Marshalls Park, which is where I went to school. That lies within the town of Romford, situated in the county of Essex, which forms part of a country called England. My home, until a future local government review takes place, may lie within the so-called Pettits ward of the London borough of Havering, in the region of Greater London, but those are names with no meaning, designed for administrative and electoral purposes only. We should never allow them to override or replace the true identities and place names of Britain's historic counties, towns and villages, but sadly that is what is happening.
	Let us conserve our heritage so that future generations understand the distinct and rich identities of a Yorkshireman, a Middlesaxon, a Lancastrian, or, like myself, a proud Essex lad. Let us defend our heritage and the history of these islands. Let us especially defend our historical counties, each with their own character—whether they be Rutland, Flintshire, Perthshire, Antrim, Middlesex or Essex—that form the foundations of England, Scotland, Wales and Northern Ireland.
	The aim of the Bill is to denote, through true, correct and proper signage, the boundaries of historical villages, towns and counties. Signs would contain the traditional crest of the village, town or county, and not the logo of the local authority, unless it was very small and placed at the bottom of the sign. Such a change in procedure would clearly distinguish the permanent historical patchwork of places that comprise our country from the artificial creations of Whitehall that come and go. The Bill would restore our heritage, inspire local patriotism, and uphold our proud local identities, and I commend it to the House.
	 Question put and agreed to.
	Bill ordered to be brought in by Andrew Rosindell, Mr. Simon Burns, Derek Conway, Mr. Lindsay Hoyle, Mr. Nigel Dodds, Mr. Mike Hancock, Mr. Mark Lancaster, Peter Luff, Mr. Greg Pope, Mr. John Randall, Bob Russell and Angela Watkinson.

Tony McNulty: As a Middlesex MP, I beg to move,
	That the Police Grant Report (England and Wales) for 2007-08, House of Commons Paper No. 207, a copy of which was laid before this House on 18th January, be approved.
	I am pleased to tell the House that we have delivered another reasonable funding settlement for the police service next year. It is important to say that that builds on considerable investment over a sustained period. Government grant and central spending on services for the police will have increased from £6.2 billion in 1997-98 to some £11 billion in 2007-08. That is a cash increase of nearly £4.8 billion, or 77 per cent.—almost 40 per cent. in real terms.
	Let me put the increase in resources for the police service in a wider context. The Government have presided over the most intense programme of police reform for more than a century. We have not only provided significant extra resources for the service and increased personal numbers, but overseen performance management, a changing mix of roles in the work force and the implementation of neighbourhood policing. All those elements command support across the House.

Henry Bellingham: I accept that the Minister will come to police community support officers in a moment, but is he aware that Norfolk constabulary is trying very hard indeed to roll out the safer neighbourhoods partnership scheme, which has had a significant impact in reducing crime in Norfolk, particularly petty crime? That is critically dependent on the 280 PCSOs promised by the Department. The figure has been reduced, which means that either the scheme is at risk or Norfolk will have to increase the precept, thus risking capping. What advice can the Minister give Norfolk?

Tony McNulty: I think that the hon. Gentleman will agree that I am known for my sympathy with Surrey, in all respects. International events are dealt with under the special grant route. On his specific point—again, this goes back to the need for a general debate about finance—history plays a strong role in the situation. I take his point about the figure being relatively low, on a per-head basis. However, in terms of precept, Surrey is at the other end of the scale. It has a significant precept, and is ranked higher than many of the 43 authorities in England and Wales, but it has a larger population among whom to spread it. In terms of actual resources, Surrey is not hard done by compared with other forces. It is not ill-served by either the formula or the precept increases. However, the hon. Gentleman makes a fair point, in the sense that it cannot be right—this is my point about the general police financing arrangement—for the precept per head to range from £88 to £210. Alongside that, the precept contribution as a percentage of overall police resources varies. It is 18 to 20 per cent. for some forces, but for Surrey, among others, the figure is way up in the high 30s, if not 40-plus per cent.

Tony McNulty: Well, there we are; it is not quite50 per cent. I said that. None the less, there should be a broadly similar service across the country. Of course there are specific needs, given factors such as deprivation, make-up and history, but those disparities are the sort of factors that will be addressed in the Lyons report and elsewhere. I half take the point made by the hon. Member for Woking (Mr. Malins), but I do not accept it in the broader sense.

Tony McNulty: I take the hon. Gentleman's second point, but not his point about underfunding. While we might still be in a transitional phase in terms of fully implementing the new funding and therefore still have floors and ceilings, I would say as sharply as I can that he should go and talk to his hon. Friends in north Yorkshire, which is not a million miles away from his area, and ask them when they want to lose the positive contribution that they get from floors and ceilings. Then he could pop over to Cumbria and speak to his colleagues there: he still has some, including an ex-Home Office Minister. As regards football, if I was being facetious—which as a West Ham supporter I am not really entitled to be—I should not think that there are many crowds around Elland road or in Bradford at the moment.

Tony McNulty: I take my hon. Friend's point in the same spirit as I have taken those from other Members. This extends to a broader debate about finance. I am sure that he is very happy about the growth in tourism on Anglesey, but that tourism is not new. Of course it has grown, and perhaps grown increasingly, but it did not drop out of the sky all of a sudden. It is not something extraordinary, as in some other cases.
	I forgot to say to the hon. Member for Shipley (Philip Davies) that there are still a few London MPs, whether in Middlesex or Essex, who sit for the Conservatives. London benefits to the tune of some33 per cent. through ceilings and floors, so perhaps he might like to talk to his colleagues there when he talks to those in north Yorkshire and Cumbria.

Ian Taylor: I made a sedentary intervention earlier and the Minister noted that Surrey is virtually at 50 per cent. and will soon go through 50 per cent. of the precept. The problem for the people of Surrey is whether that means that, when it goes through the50 per cent., the rules for Surrey police should be set by local residents rather than by the Government.

Tony McNulty: The balance between the two is partly what I have been referring to. I think I mean that in the context of the outliers on both ends of the scale. It is even more complex in the sense that those with lower precepts are not necessarily those that have the lower contributions from a local level to overall police budget. It is not as simplistic and linear as that. When I talk about collectively having a look at the finance base and the local contribution, I do not necessarily mean that everyone should gather up to the Surrey level in terms of a contribution, although I know the precept is high. Nor do I mean that everyone should be down at the Durham and Northumbria ends, where we are talking literally of £88 for a precept in one case and just more than £100 and some contributions of 18 and20 per cent. in others.
	There must be a way of collectively having a debate that is not about the national contribution or the level of funding from the centre, but perhaps more about round the edges. Increasingly, what are national policing issues—above and beyond things like counter-terrorism, which should be funded from the centre—need to be balanced by an argument about what the local contribution should be. I understand the point. It is specific at that end—in part, the Met, though it has a large population base, and Surrey and Sussex and one or two others—and at the other end historically are some other parts of the Met and some of the northern authorities.
	When we get to a situation where there has been significant investment over 10 years and where it is flatlining or becoming less in terms of growth—growth is still way above inflation—and there are these tight and serious decisions to be made on a force by force basis, the flexibility around the local contribution is a serious element of the equation.
	Significant representations have been made about the settlement. I think that we received some 40 written representations, covering some 26 police authorities, including letters from the Association of Police Authorities, chief constables, police authorities and MPs. Representations were made—interestingly, I think—chiefly in nine areas. They are the original level of the settlement, capping and council tax policy, continued use of a funding floor, police grant for the next three years—in terms of the comprehensive spending review for 2008-09 to 2010-11—capital provision for restructuring, neighbourhood policing, funding flexibilities, police efficiency and specific grants. Broadly, those issues were covered by hon. Members in today's debate.

Roger Williams: I understand that the Minister received representations from members of the Dyfed Powys police authority, who were accompanied by a Minister from the Wales Office. The main issues were community support officers and how Dyfed Powys producing its budget more prudently had worked against it. The Minister wanted to allow the authority to work towards having more community support officers, but not as many as it hoped to secure. Will the Minister comment on that?

Tony McNulty: The hon. Gentleman is entirely right that the meeting with the police authority and some MPs from Dyfed Powys was focused on those issues. Given the accelerated targets for PCSOs by April 2007—ably assisted and funded by my right hon. Friend the Chancellor to the tune of £90 million—Dyfed Powys was one of the authorities that said that it would rather sit out from the target and then try and pick it up again subsequently. The authority was effectively penalised, through not fault of its own, so I promised that I would look again and see whether more funding could be found to get back on target—not just for Dyfed Powys, but for Gwent and Cleveland. To be fair, we had squeezed the pot dry—if pots can be squeezed—to the extent that although I was pleased to find some moneys, I do not think that Dyfed Powys should hold out much hope for further moneys from the centre as part of the exercise. I was pleased to find at least some.

Tony McNulty: With the greatest respect to the hon. Gentleman, that argument works only if police authorities are rather like a child and being spoon fed. If the resource base becomes static after 10 years of growth, there are ways in which police authorities and constabularies can look at everything they do to gain further efficiencies beyond what they do now.
	The debate—in part, the wider financial debate—about contributions from the local level is one that I hope we can have. We need to see what the balance is and what it should be. It involves the notion of capping and the notion of the relationship between the local precept and the council tax. It involves the contribution from the centre and what it should be in all equityfrom local areas. There is much to be debated about that.
	I take the point that we are achieving sustained, but far lower, growth over the comprehensive spending review periods than we have thus far. One of the advantages of two-year—and, hopefully, eventually three-year—settlements is that they can begin to be planned for. I do not accept the notion, which belies experience as well, that throughout those eight or10 years of sustained and relatively high growth, all that police constabularies have done is put the money in their pocket and just carry on as they normally do. There have already been enormous efficiency gains across police authorities. Significant examination of how police authorities and constabularies do what they do has also taken place. To be fair, the picture today,10 years on from 1997, of what they do and how they do it is enormously different. That must continue because things are ever changing.
	To put it simply, the terrorism threat is enormous today compared with 1997. All forces work alongside local councils far more readily than they did 10 years ago on, for example, antisocial behaviour and community safety. There is now a genuine multi-agency approach, to use the lingo. The balance and mix throughout the country of police officers, police staff, other specialists and analysts is rightly different from the position 10 years ago. That should continue.
	In short, police authorities and constabularies need to do significantly more in a different way with the high but fixed growth rate of resources. It is a case of much more than, "Daddy, stop giving us money, we can't do things." I appreciate that that is a generalisation of the comments of the hon. Member for Banbury (Tony Baldry); it is a form of short hand.
	I shall now conclude my speech because I have been on my feet for 50 minutes or so, although about30 minutes were taken up with interventions. I am grateful for interventions and happy to take them, but we need to move on. I also appreciate that there is a time limit on some hon. Members' speeches.
	The comprehensive spending review years and the multi-year settlement provide challenges, with which forces will start to wrestle as they settle their budgets this week. There has been a good efficiency record and I expect it to continue. I believe that the police authorities and constabularies want it to continue because the efficiencies that they make release funds to spend elsewhere rather than being clawed back to the centre.
	There is a good news story about what police authorities have to do and where their priorities lie. We have listened carefully to all stakeholders in determining the detail of the settlement, which is a good one. Our proposals will ensure that all police authorities in England and Wales receive a fair share of resources next year. We have added to that some funding flexibility so that forces get the work force mixes right locally, balance their budgets and continue to improve the service.
	I am sorry that I have taken slightly longer than I anticipated but I appreciate the local dimensions to the debate and I wanted to take as many interventions as possible. I commend the police grant report to the House.

Nicholas Soames: I am grateful to my hon. Friend for giving way so soon in his response. As a fellow Sussex Member, he knows that Sussex police have been asked to do more and more. The settlement will make it much harder for them to deliver the target of 525 police community support officers, for which they budgeted under earlier Government commitments. The current plan will leave them with171 fewer PCSOs. Does my hon. Friend agree that, in his constituency and mine, that represents a genuine disappointment for people who appreciate PCSOs and know that they do a valuable job, especially on low-level vandalism and antisocial behaviour?

Nick Herbert: I agree. The Metropolitan Police Authority received the lion's share of the remaining funding, although the Government withdrew £70 million. The Met received approximately two thirds of what remained, leaving the provincial forces even shorter of resources. That means that they cannot provide the promised number of PCSOs.
	As ACPO's head of finance pointed out, the settlement is not all that it seems. A range of specific grants, for example, for forensics, supports the general grant. In most cases, they have been frozen. Consequently, as ACPO's head of finance, Dr. Tim Brain, who is also chief constable of Gloucestershire, said, the overall value of the general grant to forces and authorities has been substantially reduced. That will put further pressure on force budgets.
	In my force in Sussex, the special formula grants for rural policing, forensic testing, special priority payments and south-east allowances will remain unchanged and frozen at last year's levels. That amounts to a cut of2.8 per cent. in real terms and will cause the force and the authority problems.

Nick Herbert: The hon. Gentleman is right: more than 80 per cent. of a police force's budget is spent on pay. Pay increases generally outstrip the rate of inflation because the pay settlement is index linked. Other costs increase as the police's mission widens. Consequently, as the Minister pointed out, forces have to make efficiency savings year after year.
	The genuine question is not about this year, when forces are already beginning to face difficulties, but about future years under the comprehensive spending review. The Minister alluded to that, but we need to examine the matter. From next year, which is the first year of the comprehensive spending review settlement, the Home Office budget will be frozen in real terms, and the police have been told to expect an increase of no more than 2.7 per cent. It could be less than that. Consequently, police budgets from next year onwards will be frozen in real terms.
	The Association of Police Authorities and ACPO estimate that, by 2010-11—the third year of the proposed settlement—the police could face a funding gap of as much as £966 million. To put that in context, the police's annual national budget is £10 billion, so we are considering a potential funding gap, as set out by the APA and ACPO, of 10 per cent. of the national policing budget. That will pose very serious challenges for the police. In a document called "Sustainable Policing", the associations point out that the risk posed by under-resourcing is not that policing will suddenly collapse, but that with the contraction of capability the services provided to communities will erode, and particular functions will either be withdrawn entirely or unable to perform to acceptable levels.
	Concerns are already being expressed up and down the country about the funding that police forces might have in future. The Police Federation has gone so far as to claim that 999 calls could take longer to answer, and that the number of fully trained officers will be reduced. I will refer to that in moment. The Hampshire force is already looking to make a 10 per cent. cut in services in the next financial year, according to the local police federation, and if there is no significant increase in funding, which there will not be, its police authority predicts that it will have to make a cut of20 per cent. the following year. Durham constabulary is axing 100 police officer jobs and in the next financial year plans cuts of £3 million. Surrey has described its budget for the forthcoming year as insufficient. As my hon. Friend the Member for Mid-Sussex (Mr. Soames) has said, Sussex is predicting a budget deficit of£6 million and cutbacks. North Yorkshire police considers the situation sufficiently dire that the police authority predicts that even a 5 per cent. increase—which it will not get—would leave a £3 million deficit next year. West Mercia predicts a £1 million gap in funding, with further more acute financial concerns over the next three years.

Tony McNulty: I am sorry to interrupt the hon. Gentleman in the middle of his mildly pathetic political rant. I hope that he will get back to the issue of policing. How can he describe an increase in the neighbourhood policing fund next year of 41 per cent. as a cut? Will heplease not seek, however erroneously, to mislead the House?

Nick Herbert: Of all the fatuous points that the Minister has made so far, that was one of the most fatuous. Of course the police precept is an element of council tax, and it is absurd to claim otherwise.
	The Minister raised the specific issue of the neighbourhood policing fund. I have here a letter sent by the head of the Association of Chief Police Officers, Ken Jones, when the Minister announced the so-called flexibilities in the fund. He wrote:
	"The Home Office have now decided that only £35 million of the £105 million is to be returned to us. I am urgently seeking clarity as to the destination of the £70 million and whether the £35 million is available year on year or is a one off grant."
	Where has that £70 million gone? It has been cut from the neighbourhood policing fund; if the Minister can tell me where it has gone, I shall be grateful. As for the £35 million that remains, as I told the hon. Member for Cheltenham (Martin Horwood), the Home Office has decided to allocate £20 million to the Metropolitan Police Service. That leaves just £15 million to be distributed to forces across England and Wales. The Government like to dress this up as flexibility, but in the words of the president of ACPO,
	"Being given the flexibility to manage decline is not a position we have sought."
	In the same way, the Government announced changes in the crime fighting fund and said that those amounted to new flexibilities. Actually, "announced" is not the right word, because the Government have signally failed to make that announcement to the House despite repeated requests from Conservative Members. The Association of Police Authorities instructed its members not to obtain any publicity for the change.
	As a consequence of this "flexibility", it is possible that police numbers will fall in the future, something that would have been prevented in the past by the tight operation of the crime fighting fund. Conservative Members welcome flexibility if it is to be used sensibly, for instance to release front-line police officers from administrative tasks that they should not be performing and return them to the beat where the public want to see them. The fear is, however, that as a result of the freezing of the Home Office budget and tight future financial settlements, that will not happen.
	Only yesterday, we learnt that police officer numbers had fallen by 173 between March and September last year. The significant element is not that they fell by that small amount, but that this may be the beginning ofa worrying trend. As the president of the Police Superintendents' Association has said,
	"This is a trend we will see continue because the financial position for forces is very serious. The only way they can balance the books is to lose staff."
	That echoes concerns expressed by forces and by ACPO.

Nick Herbert: I do share my hon. Friend's concern. There is little point in increasing the number of police officers if they are to be tied up with bureaucracy, unable to do what they wish to do and what the public want to see them doing—get out on to the beat to deter and engage with criminals, detect crime, make arrests and so on. Less than a fifth of a police officer's time is currently spent on the beat. The figures that my hon. Friend gives for a town as large as Basingstokeare remarkable, but I suspect they are replicated throughout the country.
	We, and the Government, should be focusing on how to get resources to the front line, particularly in an environment in which resources will be tight. One thing that the Government should do is take a careful look at the costs of their own administration, and the costs of the central direction that they have imposed on police authorities and the police force. I have been investigating something called the police and crime standards directorate. I do not know whether my hon. Friends know what that is; they may be interested to learn that it is a directorate at the Home Office with 150 staff and an annual budget of £205 million.
	I have been looking into what the police and crime standards directorate does. It includes something called a local delivery unit, which costs £0.8 million a year—£0.8 million spent centrally to ensure local delivery. There is a partnership performance and support unit which costs £2.3 million, but there is also a performance and partnership policy unit which costs another £2.3 million. I shall be happy to give way if the Minister would like to tell me the difference between the partnership performance and support unit and the performance and partnership policy unit, and why those units are so important to driving up standards in policing.
	There is also something called the performance framework and assessment unit. That costs another £5.3 million. There is something else called the police standards unit, which costs a further £20 million. All that money would have gone quite a long way towards preserving the police community support officers who are being cut from our communities.
	The latest document published by the police standards unit is called "Co-ordination of performance assessment and support activity", and is described as
	"A joined-up approach from the Home Office".
	Such an approach would certainly be welcome and, it could be argued, unusual. Much of the document, which has been sent to bewildered police forces up and down the country, is completely incomprehensible. I decided to read no further than page 6 when I saw the third bullet point:
	"Possible courses of action flowing from this consideration include... No action to take".
	Is it not time for the Government seriously to review the cost of all the agencies that are seeking to interfere in and direct policing, the proliferation of those agencies, and the overlap between them? A significant sum of money is now being spent at the centre to direct policing. At a time when Home Office budgets are frozen and Ministers appear to have lost the argument with the Treasury about whether that will continue for the next three years, it behoves the Home Office itself to ensure that its own spending is moderated so that resources can reach the front line.
	The Government claim that they have cut the number of forms that police officers are having to fill in. They say that they have freed up thousands of police officers, and have made 7,700 forms obsolete across 43 forces. Indeed, they now claim that that number of obsolete forms has risen to 9,000. When I asked the Minister what those forms were, it transpired that the Government kept no record of the information. According to the Police Federation, it is extremely unlikely that anyone could establish whether the forms that have been withdrawn were significant, or whether any real savings had been made.
	We know, however, that the Government have introduced a very important new form which has reduced the amount of time that police officers are able to spend policing our streets properly. That is the stop form, which takes eight minutes for each officer to complete. In fact, the trend has been not to cut the number of forms and the amount of bureaucracy, but to increase the volume of red tape under which the police are labouring.
	When we debated the financial settlement here last year, we were still discussing the potential cost of police force mergers. Since then those mergers have been abandoned, leaving police forces with a bill that has not been met in its entirety by the Home Office. That is another item of expenditure that police forces up and down the country are having to cover. As the chairman of the Sussex police authority has said:
	"We have been short-changed by the Government and now the council tax payers of Sussex are being asked to pay for the failure of an unwanted Government initiative. We warned them that an enforced merger would never work and - lo and behold - it didn't."
	In this context, the Minister has said nothing, albeit I accept that he called for a debate on the future of policing. Perhaps there should have been a debate on how forces are to make arrangements in terms of closing the gap and strengthening their protective services. We will have to return to that issue, because despite the abandonment of mergers, police forces share services not only to reduce costs, but also to make sure that they are able to make significant investments and deal with cross-border crime.
	I am surprised that the Minister said that forces were already using resources in, to borrow his words, an entirely efficient and productive way, because that is not the view of the Treasury, which published a document last October explaining that resources would be much tighter than in previous years and that there would have to be efficiencies of double the current level. The Treasury said that work force reform could release
	"£250m from better overtime and sickness management, and 10-20 per cent. improvement potential across processes from investigation and custody to call handling, training and HR"—
	human resources.
	As the work force consume 80 per cent. of a police force's budgets, those are very significant savings to demand from the work force. If we had been having a sensible debate, the Minister could have told us—and police forces—exactly how the Government expect such savings to be made over the next few years so that resources do not have to be cut at the front line. In the absence of the Government offering any explanation of why the figures are justified or how the savings will be achieved, it is inevitable that we pay attention to the fears of those running the forces—the police chiefs and authorities—that those savings will not be achievable, and that as a consequence there will be cuts.
	I shall not detain Members much longer, because I know that many of them wish to speak, but let me say a few words in conclusion. Police resources are tight and police stations have been closed, and a judgment must be made as to whether the savings that the Government are now asking the police to make will impact on front-line policing. All Members support efficiencies being made and agree that it is right that any public service that has received a large increase in resources should deliver value for money to the taxpayer. Therefore, in respect of my own force in Sussex, when it proposes measures to save up to £10 million a year by 2010 and some of those measures are a good way to save public money—such as to share the £500,000-a-year police helicopter with Kent and Surrey—I hope that my hon. Friends will take them seriously and agree that they are good measures. However, we would react with concern if police forces were to talk about reducing the opening hours of smaller police stations.
	The challenge over the next few years will be for forces to deliver savings in a way that improves the service that they give to the public and deals with waste, bureaucracy and inefficiency and does not cut front-line services. The Government have a serious part to play in addressing the bureaucracy that they themselves have created.
	The Centre for Crime and Justice Studies has pointed out that the UK now spends proportionately more money on law and order than any other country in the Organisation for Economic Co-operation and Development, including the United States of America and major European Union members such as France, Germany and Spain. The largest proportion of that money—almost two thirds—is allocated to the police. That has led to an increase in police numbers. The key question will now be whether those numbers are sustainable and whether those officers will appear on the front line. What the public want to see is police officers out of their police stations and on the beats. They want to see the police being properly locally accountable. They want a criminal justice system that functions properly, and which is joined-up so that when the police make arrests and try to bring offenders to justice there is a court system and a prison system that backs them up. The public also want to see swift justice and firm justice, not soft justice as a consequence of cautions replacing convictions that should properlybe made in court, and not unenforced antisocial behaviour orders or uncollected fixed penalties. As a Member said, the public have paid their taxes and they are entitled to a return on the investment that they have made. Their tax bills have gone up, and their council tax bills have soared; they are entitled to proper levels of policing in return.

Paddy Tipping: Let me start with the good news. Police numbers in Nottinghamshire are at record levels, and the police are backed by valuable police community support officers funded by the Government. The crime statistics came out last week: vehicle crime in Nottinghamshire has decreased by22 per cent. and overall crime has fallen by 4.6 per cent.—the fifth consecutive fall. There have been significant reductions in serious crime in the city of Nottingham—homicides and gun crime. Nottingham has an undeserved reputation in that respect in the press. Police and local authorities working together have made genuine improvements. Most importantly, Her Majesty's inspector of constabulary has been looking at the Nottinghamshire police over a long period, and it has concluded that it is effective and efficient and that it is an improving police force. However, we should be cautious: in relative terms, Nottinghamshire is still a weak performer. Although much has been achieved, there is still much more to be done, and there is no room for complacency.
	Let me now turn to the bad news. All across north Nottinghamshire—from Halam to Hucknall and from Rainworth to Ravenshead—nobody believes the figures. The fear of crime continues to increase, and people complain about lack of police presence. There is a strong view abroad that the Nottinghamshire police are underfunded. That has not been helped by the strong campaign run in recent years by the Nottinghamshire police authority, which has involved the chief constable, arguing for "more cops for Notts." The reality is that grant to Nottinghamshire police has increased significantly—by £36.4 million since 1997 to£145.9 million in the current financial year, which is a 33 per cent. increase in cash terms and a 7.8 per cent. increase in real terms. The indications in respect of next year's settlement are that Nottinghamshire will receive an additional £4.5 million.
	However, there are anomalies, and there is room for complaint. The average spending on police per head of population in England in 2005-06 was £174. In the east midlands as a whole—the five police authorities—the figure was £143, and in Nottinghamshire it was £158, so in comparative terms per head of population the police in the east midlands and Nottinghamshire are being underfunded. It is interesting to note that the Nottinghamshire police authority has more crimes per officer than any other police force in the country, save one, and that the spending per offence in Nottinghamshire is the lowest in the country. Therefore, there are real concerns.
	Faced with that financial situation, and with the view abroad that the funding formula is not fair to Nottinghamshire and the east midlands, there are real problems. There is a police authority meeting on21 February and difficult decisions will have to be made. It has already been announced that the innovative Drug Abuse Resistance Education programme—known as DARE—looks set to be cut. Adam Cable, who is aged 12 and lives in Hucknall, wrote to me as follows:
	"I am...writing to say that I am terribly upset that Nottinghamshire Police Authority have decided to stop doing the DARE programme...Thanks to the DARE programme I am now more confident about speaking to others."
	He concludes:
	"I still think DARE has worked wonders for youths and teenagers and that it's a terrible loss to lose it."
	There is also speculation about the future of the mounted section. Police horses provide high-profile policing and reassurance to people in the community. The speculation is that in 2008, the mounted police will be cut, thereby saving £200,000. That is an achievable saving, but in the long term the only way to balance the books, as has been acknowledged, is to look at manpower. The figures are fairly straightforward. Nottinghamshire police face a budget shortfall of £16.5 million, if nothing changes, by 2010-11. It would be sad if the record levels of police officers that have been achieved were to be reduced.
	So what is to be done? There has been much discussion in this debate about floors and ceilings. The floors in the east midlands work against the five police authoritiesto the tune of £14.8 million, and, in the case of Nottinghamshire, the figure is £5.1 million. We cannot change the system immediately—it needs to be stable—but this is an allegedly fair funding formula, and over time, the Minister must give some assurances about how it can be tapered and wound down. He said the following in a letter of 22 January to Nottinghamshire police:
	"I recognise that those police authorities that have had their grant scaled back feel they are not getting their full share of the pot."
	I would like him to move away from recognition and into action, and to show good faith by reducing the ceilings and tapering the formula.
	Secondly, the Minister is well aware of the important work of the East Midlands Special Operations Unit, which brings together the five police authorities and focuses on serious crime. It is jointly funded by the police authorities themselves and by the Government. The grant from the Home Office runs out on 31 March 2008. Ministers are aware of the significance of what has been achieved, and I invite the Minister to look closely at maintaining that grant in future years.
	Thirdly and most particularly, the Minister and his officials must look at the work that the five east midlands police authorities are doing in response to Her Majesty's inspectorate of constabulary's report "Closing the Gap". There is a real recognition that protective services in the east midlands are very weak. In fairness to the five authorities, they are trying hard to work together, and the progress that they have made probably puts them ahead of any other region in the country. Let me talk about some of the plans thatare going ahead. A small team of officers, backed by accountants KPMG, is looking at how regional collaboration could make money available for protective services. The police authorities are working up a scheme for a regional information technology network, not least to provide shared information to help tackle back-office costs and to help with business management systems. That costs money up front, but in the long term it could produce significant savings.
	The police are also working hard to recover assets. There is £10 million-worth of unclaimed assets in the east midlands, which does not have an asset recovery body. However, part of the East Midlands Special Operations Unit is trying to recover those assets. There is also a very strong case for setting up a confidential unit in the east midlands, so that material received covertly and secretly can be shared across the region.
	The five east midlands authorities will shortly be setting up a joint sub-committee, involving all five police authorities. That is a sign of their intent. The Minister will soon be writing to police authorities asking them to make bids for collaborative projects in order to bridge the gap. I invite him and his officials to look very carefully at the work going on in the east midlands. What those authorities are trying to achieve is what he wants. Progress is being made. There is more to be done, but when the Minister issues the invitations for bids, I hope that he will ask the officials, chief officers and representatives of the east midlands police authorities to meet him, so that their bid can meet the bidding criteria that he is about to set out.

Mark Hunter: I would like to preface my contribution by congratulating our police officers and acknowledging the tremendous work that they and their support staff do throughout the country, sometimes under extremely difficult circumstances. I am sure that other Members will join me in doing so and agree that is our obligation, as Members of Parliament, to ensure that the support and funding that is so desperately needed is available to the police.
	The funding given to police authorities must be realistic, in order to allow them to deliver the high level of local policing that the population expect and deserve. Last November, the police service expenditure forecasting group estimated that without additional funding, the gap in police funding nationally in 2007-08 would be £380 million, being optimistic, or £391 million, being realistic. It also forecast that in 2008-09, that gap will reach £582 million or £656 million respectively. As the Association of Police Authorities argues, that gap
	"represents a significant proportion of the overall police budget and poses a very real risk to maintaining current services and capability".
	This report does little to reduce that gap. The mere3.6 per cent. announced does not address the funding crisis that many police authorities are facing.
	In my constituency of Cheadle, the Greater Manchester police face a £39 million deficit over the next three years, according to the Labour-run authority's own figures. Some estimates suggest that that could result in the loss of more than 600 police officers, in addition to the 216 already lost.

Mark Hunter: I have knocked on a fair few doors in my constituency and others over the years, but I have not met anybody who has said that they would prefer an identity card scheme to greater investment in our police forces and an improved police presence—so woefully inadequate at present in many constituencies—on our streets. Such people may exist somewhere. The introduction of some flexibility into police funding is welcome, but it does not go far enough. The crime fighting fund and the neighbourhood policing fund have been criticised by the APA and ACPO for placing unnecessary restrictions on police authorities. Both require a particular mix of staff that may not be optimal for the individual local communities concerned. Only the police authorities can know what mix of officers and other staff is needed to provide the best level of local policing. Placing ring-fenced restrictions on funds can lead to distorted budgets and cause highly trained officers to be moved into administrative roles. That causes inefficiency and the poor use of resources.
	The APA and ACPO have both gone on record with their requests for the freedom and flexibility needed to deliver the best possible local policing to our communities. We need to give them that freedom by stopping the ring-fenced funding and allowing police authorities to make staffing decisions that are tailored to the needs of their areas. The APA has stated that, to meet its financial needs fully, the police service needs a funding increase of more than 5 per cent. annually just to stand still. Without significant moves in that direction, the accumulated impact of the deficit facing so many police authorities will worsen, police staff and officer numbers will continue to fall and the much needed police presence in our communities will be even less substantial than at present. That will allow levels of crime and antisocial behaviour to soar to completely unacceptable levels.
	The Government grant report does not do enough. Some police authorities will be happy with the funding that they have been allocated, but many will not. They will have to make difficult decisions in the coming year about whether to cut services or seek a rise inthe council tax precept to an exceptionally high level. They should not have to make such a choice. The Government must support local policing and increase funding to a level that would allow police authorities to provide the sustainable and improved service that our local communities demand and deserve.
	Finally, the Government's approach to delivering local policing, like so many other policy areas, has been disfigured by their talking big but delivering small. It has dashed the expectations of many local communities. The stop-gap funding provided by the Government shows their inability to keep their promises, and reflects the political short-termism that permeates so much of their policy. Cutting police numbers while wasting money on big Government schemes such as ID cards shows a woeful lack of priorities and the extent to which the Government are out of touch with what the public want.

Fiona Mactaggart: Thank you, Mr. Deputy Speaker. The Home Office bunches crime and disorder reduction partnerships into crime families. I was giving the names of the crime family to which Slough belongs, and I think I got as far as Islington. The others are Lambeth, Lewisham, Newham, Southwark and Tower Hamlets. The House will see that Slough's fellow family members all have something in common—they are all in the area served by the Metropolitan police. In addition, they all have more police officers per resident than Slough, and their officers are better paid.
	I see that my hon. Friend the Minister for Policing, Security and Community Safety has returned to his place. My hon. Friend the Member for Reading, West (Martin Salter) intervened on him earlier on this point, and the Minister was rather gracious in acknowledging that his constituents benefited from the Met's poaching of officers from Thames Valley. When he responds to the debate, I hope that he will say that he will take action to bring that poaching to an end.
	Police officers in my area get a starting salary of £20,000. That compares with the £27,000 that Met officers get. After two years, those in my area get £24,000, which compares with £31,000 in the Met. A very vigorous campaign in Slough—run by me, my hon. Friend the Member for Reading, West and our local police officers—has led to the introduction of area allowances that reduce the gap, but other bribes are available. For example, Met officers enjoy free travel for a 72-mile radius around London, which of course includes the borough that I represent.
	The Metropolitan police force is undertaking a sustained and predatory attempt to recruit experienced officers from Slough. I engaged in correspondence on this matter with Sir Ian Blair, before he received his knighthood and became the Metropolitan Police Commissioner. In November 2002, when he was the deputy commissioner, he wrote to me saying that the Met
	"had persistently argued, in the past, for the cessation of adverts designed to encourage officers to move forces",
	but such advertisements are being used deliberately in my constituency. In addition, I was told that the Met wanted
	"the introduction of a transfer fee for experienced officers to recoup the cost of training."
	However, neither idea was supported by other forces around the county.
	At present, the Metropolitan police force is recruiting in a predatory manner in the Thames Valley police area. It is offering bounties—I can think of no other word—of £200 or £250 to anyone who introduces an experienced officer into the Met. Next Monday, a coach load of 30 Thames Valley officers will go to a Met open day, and the substantial pay differentials mean that it is not unlikely that we will lose some of them.
	I recall what it was like in Slough in the days after the Tory dearth of police officers. The investment made by the Labour Government led to the recruitment of more police officers, but they were very inexperienced. That was evident in the quality of our policing. Now, we have reasonably experienced officers, but they are being taken away by the Met's recruitment drive.
	My local police commander told me that between25 and 30 cops had left the area since last autumn. In Slough, there are 12 cops out on patrol for each shift, but the commander told me that he had received two more resignation notes in the previous two days. That is the scale of the impact. As he said:
	"We have the dilemma of balancing experience on the shifts or the specialist teams such as CID. The shifts are generally young in service and rely on the Sergeants for experience (but they are sometimes young themselves—in fairness, most of my Sergeants or Acting Sergeants are pretty experienced and are very good). The amount of serious crime in Slough necessitates having some experience on CID, but even then they are 'fed' from shift, so I can have some very young (service-wise) DCs, dealing with kidnaps, attempted murders, etc."
	The situation for policing in my town is being made worse by the predatory recruiting of the Metropolitan police.
	The Minister generously said that some local problems ought to be solved by broad discussion. He responded positively to my hon. Friend the Member for Reading, West who actively supports the campaign, so when he replies to the debate will he take on board proposals to deal with the waste of public money that occurs when one police force invests in stealing trained officers from another force?
	I am of course aware that some officers will for life reasons want to leave Slough and move to the Metropolitan area. That is fine, but I do not approve of bounties and targeted recruiting. Will the Minister consider stopping the Metropolitan police and other forces spending public money on bounties and on ringing and texting serving officers in other forces? Obviously, they should provide information about posts, but aggressive marketing and recruitment is inappropriate.
	Will my hon. Friend consider the imposition of a transfer fee if officers transfer to another force after training, whereby the receiving force would recompense the sending force for the cost of training the officer? Public money is used for that training, and transfer fees could make a huge difference. Perhaps future settlements could reflect the number of officers trained in a particular area but who transfer elsewhere. I take Sir Ian's point that the Met has traditionally been an exporter of officers, so it might benefit from that proposal as much as areas such as mine.
	Finally, will my hon. Friend look at the cliff faces in police pay that still occur? I was grateful that the campaign that we ran after the 1997 election resulted in area allowances in places such as Slough, but there is still a substantial pay gap between Slough, which is similar to the Metropolitan police area, and the Met. The situation will be made substantially worse, because although terminal 5 will be policed by Metropolitan police officers it will be on the doorstep of my constituency. A number of officers will be attracted by the idea of completely indoor policing, as well as the extra money and firearms training that will accompany it.
	There are real challenges, which are not the result of Government policy but have arisen from the way that we deal with the boundaries of our localised police forces. The Mayor of London keeps asking me why Slough does not join London, and there are moments when I think that that would be the right thing to do. One such moment is when I look at the pay of our local police—another is when I look at our local transport services—but if the Minister could respond to proposals for transfer fees for our police, the option of joining London would look less attractive.

Ian Taylor: The Minister was benign and positive during his opening speech, and we were grateful for that, although he reverted to his more usual acerbic self during later interventions. It is perfectly reasonable to say that policing in general is of a high standard and that not everything has gone bad.
	In my constituency, which is in the borough of Elmbridge and thus in the county of Surrey, the police have a good record. Surrey police work hard and effectively, often in difficult circumstances, and I pay tribute to them and to Inspector Yearwood, who is based at Staines but covers north Surrey and, therefore, my constituency. They do an effective job in often stretched conditions. Policing has other impacts locally, not least through co-operation with the volunteers who man two police stations in my constituency and with the neighbourhood watch.
	I do not want to paint a bleak picture. Surrey is a safe county. The crime statistics have shown one or two worrying signs recently, but by and large, Surrey is one of the safest counties in the country and we want to keep it that way. Keeping Surrey safe means having an effective and well resourced police service, which is where some problems begin to emerge and where I pick up on some of the points made by the hon. Member for Slough (Fiona Mactaggart).
	Part of my constituency used to be in the Met. Under the Labour Government, co-termination of boundaries meant that Cobham, Claygate and related areas in that part of the constituency left the Met and came under Surrey police. For a while, there were transitional payments, which helped. There was also some assistance for Met officers who wanted to transfer to the Surrey force, which was welcome because we received extra resources. However, the Minister should not ignore the fact that now that the transitional arrangements have ceased there are considerable problems. I shall take advantage of the speech made by the hon. Member for Slough and refer everybody to her remarks. I know about the problems and tensions she described, because our area, too, borders on the Metropolitan police area.
	Of course, some serving Met police officers live in my constituency. One of them recently drew attention to the fact that the Met police would have responded much more quickly to some of the local incidents in Surrey. I am not being critical of Surrey police, but we are beginning to worry about stretch and the ability to respond to emerging pressures.
	We have an excellent chief constable, Bob Quick—I am not saying that just because he is giving me lunch on Friday, but because there are undoubtedly problems and he is trying to deal with them. He is attempting to adjust services to the problems we face, which is not easy because the public like to see police on their streets. They have adapted to, and now admire, police community support officers; indeed, they expected more PCSOs. However, unfortunately, because the Government have reconfigured some of the budget for the current year, we will receive not the £1.7 million for CSOs that we were expecting but only about £450,000, which means a net reduction of 107 officers. I do not know how many CSOs there will now be in my constituency, but obviously the reduction will mean rationing in Surrey. In places such as Cobham, we have become dependent on the work of CSOs and we were expecting another officer. I paid tribute earlier to the work of the neighbourhood watch and the volunteers at Cobham police station, but they depend on CSOs, so if there are to be fewer of them I want to know how the Minister will protect the county of Surrey.
	The Minister is obviously a master of the funding formulae, but that does not mean that they are right—only that he understands what they are at the moment. The problem for Surrey is that the formulae are not right. Our county borders on the Metropolitan police area, but we have major road conurbations and supplementary policing responsibilities at Heathrow and, at the other end of the county, extra responsibilities for Gatwick. There are terrorist implications and the police have to respond to that situation and maintain awareness. There are extra pressures when there are special events.
	In addition, we had the merger considerations with Sussex police. I advocated that the merger should be aborted very early on, but in fact it was aborted very late. The figures are rather interesting. I hope that the Minister will listen to this, because he gave me what Surrey police called an obfuscating answer in the recent oral questions session in the House. The total cost to Surrey of the aborted merger was about £811,000. That included manpower costs; it is higher than the figure that the Minister will have, which is about £560,000. The grant to Surrey police from the Government is about £100,000. There is a shortfall. These things are cumulative.
	The Minister has already acknowledged to me that the police precept in the county council tax contribution in Surrey is just under 50 per cent. That will soon rise, but over the next three years the underfunding of Surrey police that is estimated by both the police and the police authority is about £18.2 million. There are no ways in which further efficiency gains can be found. Surrey police have already found efficiency gains that exceed the Government's target. The Government wanted a£5 million efficiency gain; the police have achieved about £8 million.
	The Minister has to understand that there are severe problems in Surrey that are not necessarily evident. It is inexplicable that Surrey does so badly in relation to the other shire counties. The per capita figure is about£89 and the average is about £107. I do not want him to come back to me with the fact that there are 14,000 more officers compared with 1997.
	I am not saying that everything that the Government have done in relation to policing is bad. I am saying that we are dealing with some serious problems now. In my view, those problems derive from the fact that, given its geographical position, a county such as Surrey has stresses and strains that are not recognised by the formula. Surrey has problems in raising further money from local people to fund its police force, not least because council tax increases will be capped at 5 per cent. anyway, even if the people of Surrey wish, in a fit of generosity, to pay more council tax. There areissues in relation to the organisation of the police force, not least its proximity to the Met and that factthat policemen and women make a comparison with people who happen to work for the Met but live near them.
	All those things cumulatively can be thrown out of gear by big problems that might emerge, such as the EU heads meeting at Sandown Park, which happens to be in my constituency. We also get big criminal trials. In one case, there is not a trial but a continuing inquiry into the tragic murder of Milly Dowler several years ago. The culprit is yet to be found. There is also the evident problem that a lot of the crime—particularly the more violent crime—in Surrey is carried out by criminals who come across the boundary from London and then go back again. I ask the Minister please to think of Surrey sympathetically and to be constructive in his responses.

Mark Tami: I welcome the increase that we have seen this year. Clearly, we would like more. I am sure that every hon. Member wants more for their area. However, the £76.3 million in general grant that North Wales police will receive will be an increase of some 3.6 per cent. or £2.6 million over the previous year. I stress that that is an increase. It is not a cut, a reduction or a decrease. It is not less, but more. The inflation-plus increase this year builds on the extra investment of previous years—investment that has resulted in a dramatic increase in policing and in support staff. At the start of the financial year in 1997, there were a total of 1,367 police officers in North Wales police. By 2006, their numbers were about 1,600. That is an increase of about 18 per cent.—a higher increase than that experienced in many other parts of England and Wales. There has been an even greater increase of nearly 100 per cent. in support staff. Numbers are up from 533 in 1996 to 997 in October 2006, as my hon. Friend the Member for Vale of Clwyd (Chris Ruane) pointed out. There are now 58 community support officers. That will rise to more than 240.
	Those extra resources have certainly produced results. There has been a fall in crime and, importantly, a greater police presence on the street, which I am sure that hon. Members would agree is what they want and certainly what the general public want. Clearly, we still have a long way to go before we have a police presence on every corner—not that we ever did—but we are making good progress in the right direction. The introduction of community beat managers has been a major success in putting police where they should be: at the heart of local communities. I can certainly testify, as my hon. Friend the Member for Slough (Fiona Mactaggart) has also said, that the number of people coming to see me to complain about a lack of police presence has gone down compared with when I entered the House, although we have a long way to go.
	The investment must be sustainable and long-term. Budgets need to be planned accordingly. That is key. Finance is gathered not only from central Government, but from the council tax payer. The council tax payer has certainly made a sizeable contribution. In 1996, the police precept on a band D house was £46.21 in north Wales. That has now risen to £166.89. The increasein the police share of council tax has been in excess of 273 per cent. The response from the chief constable of North Wales to this year's increase—I again stress that it is an increase—has been to claim that his budget has been cut and that 120 jobs will go this year, with further job losses in future years. To head off that situation, he wants council tax payers to pay an increase in the precept of some 12 per cent. A point has been made about the inflation rate in the police force, which he claims to be 6 per cent., although, as has been said, I think that that has now fallen to 5 per cent. However, 80 per cent. of police costs are salary costs, which are running at around the 3 per cent. level. The inflation rate of the remaining 20 per cent. of costs must be staggering.
	I am sure that we could all argue about those issues long into the night. I know that I can speak for other colleagues in north Wales when I say that we feel that we have on many occasions. However, there is a more serious issue that arises and that is at the heart of the whole funding debate. It gets to the heart of the problem in north Wales. The Home Office grant provided this year was delivered at the level that North Wales police expected. It was not less than they expected. If we examine the figures from previous years, a similar picture arises. The figures are produced by North Wales police, not by me or the Home Office. In 2004-05, North Wales police anticipated an increase in the grant of between 2.2 and 3 per cent. They got2.7 per cent, within the expected band. In 2005-06, they anticipated an increase of between 2 and 3 per cent. They got 3.85 per cent., which is considerably above what they were expecting. In 2006-07, they expected an increase of between 2 and 3 per cent. and they got3.1 per cent. One would be hard pressed to argue that the Home Office has failed to meet the expectations of North Wales police.
	If we look at the council tax precept, however, we see a somewhat different picture. Again, the figures are produced by North Wales police. In 2004-05, North Wales police expected an increase in council tax precept of between 23 and 25 per cent. They received 19.4 per cent., which is still a dramatic increase. In 2005-06, they expected an increase of between 14 and 16 per cent., but received 4.86 per cent. In 2006-07, they expectedto receive between 10.5 and 12 per cent. and received 5.67 per cent. It is clear to me that their expectations from the council tax precept have been wildly unrealistic, not just this year, but in many years in the past. In addition, the Welsh Assembly Government have made it clear in the last few years that they will cap increases that they think are excessive at around the 5 per cent. figure.
	Why, we must ask, have North Wales police been producing budgets that they know they do not have the funding to meet? Why have they recruited officers and staff in the knowledge that they do not expect to have the funding to meet their ongoing cost? At best, it is brinkmanship to bring about extra funding, or, at worst, it is mismanagement—it is probably both. Even if North Wales police are doing such things with the best of intentions of receiving extra resources, they are playing with employees—officers and support staff—who are doing a good job for the people of north Wales. Worry about the financial management of North Wales police is also caused by the situation involving the general reserves, which are predicted to fall to 1.4 per cent., which is well below the 5 per cent. guideline figure.
	If North Wales police have to examine their expenditure, they will find many areas on which they could cut back. It is important that such cuts do not fall on front-line policing. Cutting support staff is not the answer either, because letting support staff leave only to replace them with front-line officers is neither a sensible nor a cost-effective approach. Again, we are seeing an element of brinkmanship.
	I will not go into great detail on how North Wales police could cut back, although I am tempted to do so. However, I will give a few illustrations of where cuts could be made. The publication "Y Glas" is sent to every home in north Wales and has included such vital information as a poem in praise of the chief constable. The latest edition informs us that John Nettles will be filming "Midsomer Murders" in north Wales. Although that is very interesting stuff, the money that funds the publication—some £200,000—could probably be better spent on front-line policing. I am pleased that the police authority has acted on that.
	The chief constable wants to take forward mounted police at a cost of about £300,000, although that money could be better spent. The fleet of Mercedes cars has been extended to further grades. The police uniform has been changed to black and now includes a baseball cap. In addition, the force failed to take up the first tranche of money for CSOs, and the chief constable and his colleagues have blogs, which are translated, that have cost more than £4,500 to date. Of course, opinion and research companies have been employed to point out that people are crying out to pay even more council tax than they do at present. There was also a famous inquiry costing £82,000 over a leaked document from the police authority that resulted in members of the police authority being DNA tested. I could go on.
	Whatever the arguments and counter-arguments about the present difficulties, we need to maintain front-line policing. As hon. Members on both sides of the House have said, we need to find a position that is sustainable not just now, but in the future. North Wales police have received substantial increases in funding from both central and local government. The funding has produced good results and we need to carry on the work. If the situation is sustainable, we will be able to build on the great success that we have already achieved.

Tony Baldry: Policing is probably one of the most—if not the most—important issues to our constituents. For Cherwell community partnership, which is made up of Cherwell district council and all the other local councils and agencies, making Cherwell a safer place to live is the lead priority.
	I endorse the comments made by the hon. Member for Slough (Fiona Mactaggart). There is considerable frustration about the number of police officers who train in the Thames valley, but then transfer to the Met. The hon. Lady did not mention the double whammy that because the Met provides those officers with transport costs, they can continue to live in the Thames valley and travel free to the Met area. There is an additional unfairness for parts of the country such as mine because police officers tend to get drawn from places that are perceived to be quieter, such as north Oxfordshire, to areas of high stress, such as Oxford, Slough and Reading.
	The hon. Lady, like me and every other Member for the Thames valley, would have received yesterday an e-mail from Sara Thornton, the excellent acting chief constable of Thames Valley police, which said:
	"the financial outlook is very severe ... ACPO and APA have produced a number of forecasts which make it clear that without additional funding or changes in current policy and priorities there will be a significant and increasing gap in police funding over the CSR period ... Over 80 per cent. of the Police budget is accounted for by officer and staff costs and the real worry is that this gap will only be closed by a loss of officer numbers ... The Thames Valley budget for next year ... as it currently stands with a 4.99 per cent. increase in Band D Council Tax and nearly£7 million cut from support costs ... is balanced. I have been able to do this by taking money from Headquarters functions and have therefore avoided cutting frontline operational officers. I very much doubt that we will be able to do this again next year. Indeed the draft revenue estimates for 2008/9 suggest that there is a £20 million increase in budget needed and only a £5 million increase in revenue support grant—clearly some very hard choices will have to be made next year."
	The acting chief constable is clearly not alone. It is not like Thames Valley police is somehow out on a limb. Ken Jones, the president of the Association of Chief Police Officers, has said:
	"To maintain ... high standards, the Government must maintain sufficient levels of funding. Demands on the police service mean that, although the 3.6 per cent. funding settlement for the service remains above inflation, our expenditure increases at a far greater rate, a fact that must be reflected in our financial allocations."
	In response to the Government's grant settlement, ACPO expressed concern about the lack of projection for the next financial year and fear that the grant level could be as low as 2.7 per cent. I think that it could be even lower than that because all sorts of pressures on the Home Office, such as the need for prison building and to deal with asylum seekers, could well drive the figure down lower.
	As the head of the ACPO finance committee, the chief constable of Gloucestershire, says:
	"The settlement ... gives us no firm foundation for the future ... Many authorities will just about be able to get through next year, but unless there is some guarantee of funding for the future it will only be a matter of time before the cuts become cumulative, with consequent decreases in service levels.
	The Minister said in his speech that he did not want to restrain police authorities by flatlining them, but I genuinely do not understand how, if revenue support for police forces is flatlined over the next few years of the comprehensive spending revenue, we will see anything other than a serious reduction in the number of front-line officers. I predict that when this debate takes place next year, considerably more hon. Members will wish to participate because the cuts on front-line services will have started to bite.

Tony Baldry: My hon. Friend makes an excellent point. Whether in Guildford, Banbury or Bicester, the fear of crime is best dealt with if people are confident that there will be police officers out on the streets.
	An article in  The Observer on 14 January with the headline "Police funding crisis 'will put public at risk'" said that the Police Federation, which represents Britain's police officers,
	"claims 999 calls will take longer to answer and that the number of fully trained officers will be reduced."
	That concern is shared by the acting chief constable of Thames Valley police, chief police officers across the country and rank and file police officers, as represented by the Police Federation. Ministers must confront the Treasury and make it clear that if they do not receive a year-on-year increase in funding there will be a cut in front-line funding. The Minister said that police forces must become more efficient, but funding has flatlined and police forces have to cope with ever increasing demands. For example, the witness protection provision of the Serious Organised Crime and Police Act 2005 came into force in April 2006, and administrative support is required to manage the scheme. The nature of major crime is constantly changing, and police forces have to apply the national intelligence model, and are engaged in counter-terrorism initiatives. Alternative criminal tactics require additional resilience and resources. More work is done in organised crime units, and the Thames Valley force requires a new team of appropriately vetted and highly professional intelligence practitioners to set up a confidential unit.
	There are ongoing demands on police forces, which are ever more sophisticated in their response to major crime, specialist crime and, as we have heard, the increased terrorist threat. I fully endorse and support what my hon. Friend the Member for Arundel and South Downs (Nick Herbert) said. Our complaint is that the Chancellor of the Exchequer made a serious error of judgment when he decided early this year to freeze the Home Office budget until 2011. He effectively announced that policing and security were not a priority, creating considerable difficulties for the police. This year, there has been an increase in the Thames Valley police budget of 4.62 per cent. If the budget is to stand still, next year a 5.94 per cent. increase is required and 4.3 per cent. increase is required in 2009. Something must therefore give, and I suspect that it will be front-line policing and PCSO provision, on which a promise was made but never quite delivered. The 2005 Labour manifesto pledged to deliver more than 24,000 PCSOs, but no sooner was the print dry than the Home Office reneged on its word, and reduced the national number to 16,000 without adequate explanation.
	In the Thames Valley, 675 PCSOs were originally promised but, in fact, 417 will be recruited, so there is a shortfall of 258. Even worse, district and parish councils are increasingly told that if they want PCSOs they must provide match funding. In effect, they must pay for PCSOs twice, through the police grant and through the district council or parish precept, even though the amount of funding for the police from council tax has increased substantially. In 1996-97, almost 85 per cent. of police force revenue was financed directly by the Government, but that percentage has fallen substantially, and it is about to go down to 60 per cent. in 2006-07. Council tax accounts for 21 per cent. of police funding—up from 12 per cent. in 2001-02—so a stealth tax has been levied, as more and more burdens are imposed on local people and the amount of money paid by the Treasury and central Government has decreased.
	The Minister kindly said that he would meet the hon. Member for Reading, West (Martin Salter) and my hon. Friend the Member for Buckingham (John Bercow)—I hope that he will extend that invitation to me, as I represent an Oxfordshire constituency—to discuss funding for the Thames Valley force. He suggested that he wanted to engage in a process. This is an extremely important subject, and we all want to engage in the process of trying to ensure that over the next two or three years our police forces are properly funded without cutting the number of front-line police officers.

Albert Owen: Police funding in the past 15 years has gone through a number of different phases. It has gone from famine under the Conservative Administration to a feast in recent years. Every feast is always followed by a diet, and we are in that position now, as people have to tighten their belts and manage their budgets more responsibly.
	In the past 10 years, the performance of North Wales police has improved considerably, and the force's detection rates have increased faster in the past four to five years than those of many other areas. The north-west Wales division, which covers my constituency of Ynys Môn, is one of the best performing divisions in the United Kingdom. Like many hon. Members, I have regular meetings with the chief superintendent and local inspectors, who point to advances in community policing such as the neighbourhood policing teams that have won the trust of the community—something that has been missing for many years. The Government have an excellent record of funding community policing. In 1996, there were no community support officers at all, but in north Wales, we now have 58 CSOs—a figure that will rise to 240.
	PCSOs have made a real difference. North Wales police missed out on the first tranche of funding, because the chief constable suggested PCSOs could not do the job that he wanted them to do. That is certainly not the case, and he has changed his mind, but we have lost out on valuable Home Office money. That money was left unclaimed, but there are complaints now that that there is insufficient money from the Home Office. Good police performance in north-west Wales is the result of the dedication of police officers and, indeed, civilian staff, accompanied by steady increases in Government funding. In north Wales this year, and in 2007-08, there will be a rise in grant of 3.6 per cent., and the area has received a real-terms increase of33 per cent. since 1997.
	In addition to the increase in central funding, there have been massive increases in the council tax precept: there has been a 53 per cent. increase over the past three years, and a staggering 100 per cent. increase in the past five years. Such increases, as my hon. Friend the Member for Alyn and Deeside (Mark Tami) said, are not sustainable and, indeed, are unacceptable. Police numbers in my area have increased by 18 per cent. compared with the UK average of 11 per cent. since 1997, and we have 1,600 police on our streets. In that period, the number of civilian staff doubled to 997. In the comprehensive spending review, as the hon. Member for Banbury (Tony Baldry) mentioned, the Chancellor made it clear that the Home Office would receive flat-rate increases between 2009 and 2011. It was known well in advance that an average increase of 3.6 per cent. in the general grant would be awarded in 2007-08, yet when it was delivered the police claimed that the Home Office had cut their budget. The general grant increase is worth £2.6 million while total funding is £76.3 million. The police have secured extra revenue from council tax, but resources still do not meet its expectations. Indeed, the police are still considering increasing council tax by between 7 and 10 per cent. per annum. The Welsh Assembly Government have indicated that they would cap increases at 5 per cent. There has been poor budget planning by North Wales police during a period in which there were sufficient funds coming from the Home Office. North Wales police has made some controversial management decisions, some of which were referred to by my hon. Friend.
	In an intervention, the Minister mentioned that he launched the St. Asaph call centre, but I can tell him that the call centre is not working. There are insufficient numbers of front-line staff answering calls, and the centralisation that has taken place in North Wales police has come at the expense of moving experienced and knowledgeable people from different parts of the division to a central call centre. It is a white elephant, and it is sucking front-line staff into it to plug gaps.

Ian Lucas: My constituents in Wrexham, north Wales, tell me that they strongly think that a 5 per cent. limit, in relation to council tax increases, is, if anything, too high. Does that agree with the views expressed by my hon. Friend's constituents, and do they feel that the projected increase of 10 to12 per cent. would be way beyond their means?

Tony McNulty: When Ministers say that we have had a good debate, they often do not mean it, but I do mean it. The debate has given Members the opportunity to air local concerns—I accept that, as the hon. Member for Banbury (Tony Baldry) said, policing is, rightly, a hugely important local issue—and to make more general points about the processes, the formulas and all the other elements of the settlement. In that sense the debate has been good and focused.
	The hon. Member for Banbury is also right to say—it is jargon now, and I do not remember when the expression was first coined—that the broader issues of finance and policing in our communities are a process, rather than an event. That seems to apply to most things these days. Although many contributions focused on the specifics of the immediate settlement and its consequences for individual communities, many hon. Members, not least the hon. Member for Esher and Walton (Mr. Taylor), dealt with the broader picture. I do not blame hon. Members for adopting either approach.
	The debate was constructive and represents the start of a wider debate. I do not say that as an abdication of responsibility for the development of public policy on policing. I say that because the subject is important enough for us to have a proper national debate, as I suggested earlier.

Tony McNulty: I will, in all candour. We had hoped that the Association of Police Authorities, the Association of Chief Police Officers and Government consultation processes would all be aligned and would be completed by the end of the year, but that was not possible. ACPO is taking considerable time to reflect on these matters, which it is important to do, and will not be ready until April. The position of the APA is similar, though it may not need until April. To engender the debate, the Home Office will set out in February the broad vision and way forward in terms of the components of reform—broadly, what we need more of and what we need less of.
	Some of the issues that I have not touched on today but which are important were mentioned by Members—unfairly, in the case of the hon. Member for Arundel and South Downs (Nick Herbert)—such as the function of the police framework assessment, the police standards unit and other units in the Home Office.
	I want to get to a stage whereby, on the back of good performance, the Government, while of course still measuring that performance, step back more and more in terms of inspection, bureaucracy and telling people what to do in a very prescriptive way and let local forces concentrate increasingly on that while we concentrate increasingly on output. The Home Office statement in February will engender a wider debate with colleagues in the APA and ACPO. In terms of reform and vision, I agree with much of the joint ACPO-APA document on sustainable policing; I could sign up to that tomorrow. I have some concerns about their comments on finance and resources, which I am happy to discuss with them, but I think that many would agree with the overall thrust of the document.
	I am grateful to many Members who talked about the huge improvements in policing that have taken place and made their comments in that context. My hon. Friend the Member for Sherwood (Paddy Tipping), who is not with us at the moment, said that there have been huge improvements in Nottinghamshire although there is a long way to go. He echoed a point made by many other Members: whatever we do of substance in terms of reducing crime and getting more and more police officers on the front line, there is real difficulty in trying to shift the public perception of how safe or otherwise their areas are. The hon. Member for Esher and Walton rightly said that although, compared with many other areas, his area is safe—we may want to put that in inverted commas or contextualise it—that is a hard message to get across to many of his constituents, who still perceive it as relatively dangerous or crime-ridden. For the record, my borough of Harrow invariably stands at anything from 30th to 33rd in the crime rankings in London, including the City of London, yet it is still very hard to shift people's perceptions—although things are changing with the introduction of the safer neighbourhood teams. That is not for political reasons, but simply because crime is such an important issue.
	Members are right to ascribe to the police the importance that they have in this debate, and I want to dwell on a few of the specific points that have been raised. With the greatest respect, I will not refer to the comments of the hon. Member for Cheadle (Mark Hunter), not least because we heard them all last week in the Manchester debate. I took the opportunity to have a little comfort break at that point, because I knew that it was the only break that I was going to get. I apologise to him for my absence. I am sure that his speech was as excellent this week as it was last week.
	Several Members on both sides, including hon. Friends from the Thames Valley, Kent and Surrey, spoke about a situation that arises particularly in relation to the Met and its surrounding forces and to a lesser extent elsewhere. It is a fair point, but I do not have a piece of paper in my pocket to give an immediate response to it. I am not sure whether transfer payments are the answer. As Ian Blair has said, as much traffic goes the other way. I should think that the Met is, at worst, static in terms of imports and exports. Other Members mentioned Greater Manchester and its influence on Lancashire, Cheshire and other forces. However, the incentives offered by metropolitan forces outside London are not of the same nature as the Met can offer. It is worth exploring further the relationship between metropolitan forces with a larger resource base, relatively speaking, than the county forces surrounding them.
	I am sure that the hon. Member for Buckingham (John Bercow) and my hon. Friend the Member for Reading, West (Martin Salter) will be more than happy for my hon. Friend the Member for Slough (Fiona Mactaggart) and the hon. Member for Banbury, to come one, come all for a chat about Thames Valley and its relationship with the Met as regards recruitment and a whole range of other issues. It is certainly a matter worth exploring. By the by, I add to the comments of all Thames Valley colleagues about the excellence of chief constable Sara Thornton and all that she is doing in the Thames Valley. I wish the authority well.
	I am not sure that I would go as far as to say—though I understand why people say it—that this is all about bribes and predatory behaviour and all those other elements. I understand why some of my hon. Friends talk in those terms.
	As a small aside—it is germane to the points raised by the hon. Member for Esher and Walton and another Member representing Sussex, though I cannot remember who—we are, in tandem with the Department for Transport and through the Boyce-Smith report, looking at the policing of airports and who should pay for it. That relates to some of the points made about terminal 5 at Gatwick and other issues that impact on Surrey as well as Sussex. We will report on that in due course.
	I am grateful to the hon. Member for Esher and Walton for the way in which he put his case. I have taken into account the point about the peculiarities— historic, geographic and otherwise—of some of the south-east forces, which requires further detailed consideration. I do not have all the figures to hand but when there have been specific international events at Sandown or elsewhere in Surrey, with unique policing dimensions, sooner or later—on balance and to be fair to the Home Office and Surrey—they have been dealt with. I do not think that the point about proximity to London in that regard means that it has been somehow ill served by the special grant regime. Again, some of the broader points about policing, crime markets and wider points that go beyond recruitment and the whole nexus of London and the surrounding counties, including Essex, were well made. I will try to think positively—I urge everyone to do the same—not just about Surrey's predicament but about everybody's position as we go forward into what will be, as I have said in all candour, three quite tight years.
	I would say to the hon. Member for Banbury and others who alluded to terrorism that the funding for counter-terrorism has increased fourfold since about 2002—to the best part of £0.5 billion. That is not part of the settlement and does not count as money going directly between forces and the centre. It is a grant put on top, so terrorism should be taken out of the equation. That does not mean that points raised about gaps in protective services at level 2—referred to by my hon. Friend the Member for Ynys Môn (Albert Owen) and others—do not exist, but they are starting to be addressed. Quite deliberately, counter-terrorism has been put to one side and needs to be dealt with in a regional, local and national configuration. That is being done.
	The hon. Member for Banbury and others raised another important point, which I tried to write down, about continuing demands being made of our police forces in ever-more sophisticated ways in an ever-changing world. That is absolutely the case. We are trying to address those points in an environment in which growth in resources has slowed down. That is the safest way of saying it, rather than the impression of "cut, cut, cut" that has been created by some hon. Members. There has been significant growth over eight or nine years. Yes, the rate is slowing and yes, it causes difficulties, but if all things remain the same and we go forward to the year after next, we should be able to address the issues collectively in all substance. It is not simply the point that 80 per cent. or more of funding is in people: if it is nothing more than 3 per cent., how can the inflation rate be described as very exorbitant?
	This issue is also about, to use the jargon, processes, business re-engineering and all the other elements. It about doing things smarter. It is about more and more civilianisation of custody suites, thus releasing police officers for the front line. It is about, however traduced, doing more on bureaucracy. It is about looking into the Police and Criminal Evidence Act 1984 and carrying out a full review of the Act, taking into account all the paperwork and paraphernalia surrounding the process of an arrest all the way through to dispatching people to the courts. That is about to commence. It is about the balance between summary justice, fixed penalty notices and who goes through the courts. That does not apply in a sharp, black-and-white, "That's a dreadful way to do it; do it this way" manner, but in a serious fashion.It is about IT improvements such as the greater implementation of Airwave radios and live scan units for fingerprint images. Many exciting, challenging and sophisticated innovations and changes are happening in policing. I therefore believe that many of the efficiencies that we need to continue to secure from policing will come far more readily than would otherwise occur.

Tony McNulty: I will not give way, partly because there are only two minutes left and I promised that I would not speak for that long, and also because I do not have the answers about port policing. I will happily write to my hon. Friend.
	I broadly agree with much of what my north Wales colleagues said. They have made the same comments previously. It is important to point out that North Wales receives an extra £7.3 million from the Home Office in special grant to prop up the general grant as well as £1.2 million to cover relocation from |South Wales. We are not therefore cutting the money for North Wales police or any other authority in Wales. I have written in terms to the chairman of the North Wales police authority to say so.
	Although the subject is emotive and hugely important, the police—from the Fed to the supers to the sergeants to ACPO and the APA—would demand that we dealt with policing calmly, maturely and reflectively, thus according it the importance that our communities do. I commend the report to the House.
	 Question put and agreed to.
	 Resolved,
	That the Police Grant Report (England and Wales) for 2007-08, House of Commons Paper No. 207, a copy of which was laid before this House on 18th January, be approved.

Phil Woolas: I thank my right hon. Friend for raising that point, which he has made forcefully on behalf of his authority and others previously. I understand his point. Two floors operate in distributing the money: the overall floor, which protects councils from sudden decreases and grant, and the floor in two of the three social services funding blocks. The latter exists because of the changes in the formula for 2006-07 and 2007-08. The statement today, as I know my right hon. Friend appreciates, relates to the next financial year. Consultation over the three-year settlement will begin later this year. Obviously, both the policy towards the overall floor and the policy towards damping within the social services block will be given consideration.
	I suggest that the House take heed of the important point that my right hon. Friend makes: although there are many benefits from multi-year settlements, such as councils' ability to know their future finances, there are councils who argue that injustices within the system would be locked in for three years, not one. The debate is therefore an important one.

Phil Woolas: Perhaps I am just getting middle-aged, but the ingenuity of the arguments that Members employ to claim a special case for their authorities never ceases to amaze me. I acknowledge that the hon. Lady is standing up for her area of Richmond—which I think has recently been in the news because of its policy on four-wheel drive vehicles.
	Let me correct the hon. Lady's point. She is referring to the allocation of grant following the changes inthe baseline. When any Government allocate grant on a formula basis, they have to do so on the basis of a like-for-like comparison. A number of local authorities, especially in London, made the point in consultation that the allocation appears to be lower in cash grant in some cases, such as when an authority is, so to speak, on the floor at 2.7 per cent.—and I am fairly sure that the hon. Lady's authority is a floor authority. That appears to be the case because of the like-for-like comparisons year on year. The authorities that have argued that the actual grant is not as much as it appears to be on paper make a point that would be fair if in alternative years, when the like-for-like comparison gives them more than the allocation appears on paper, that sum were returned. I have yet to hear that offer being made.

Phil Woolas: I did not say what the hon. Gentleman says that I said; I said that councils said that they were not getting that increase. I am simply making the obvious point that, if we make a like-for-like comparison over the period in question, what I have said is correct. I will give the hon. Gentleman the figures for his local authority if he wants me to. In the case of Richmond, the average increase in formula grant over the 10-year period—over which it is possible to iron out the like-for-like ups and downs—is 3.7 per cent. Although the councils of the hon. Gentleman and the hon. Member for Richmond Park say that there is a reduction this year, that simply reflects the change that has been made over the period. Perhaps I should now stick to my word and take an intervention from my hon. Friend the Member for North-West Leicestershire (David Taylor).

David Taylor: I am grateful to my hon. Friend for giving way. Sadly, Leicestershire had the lowest grant increase of all 150 upper-tier unitary authorities—£0.6 million, or 0.8 per cent. Why was that so? Well, the Minister talks about like-for-like adjustments, but in our case the transfer of supported capital expenditure was based on 2005-06, when there was a significant spike of almost £13 million in capital expenditure because we were replacing a number of schools, one if which is in my constituency. Can Leicestershire be treated in the same way as Norfolk and Lancashire, both of which had their spikes removed? Norfolk's figure was reduced to £56 million from £71 million, and Lancashire's was reduced to £32 million from£36 million. Such an approach does make a difference. We are grateful for what has happened, but our increase remains very low, compared with other unitary and upper-tier authorities.

Phil Woolas: I had spotted the point that the hon. Lady makes and I was aware of that. The PCTs are one of the major partners, if not the major partner, of local authorities in the delivery of local area agreements. Therefore the alignment of financial periods and spending decisions, both revenue and capital, is very important. It follows that it is essential that the partners work in partnership. I acknowledge the point that in some instances the financial decision-making of the local authority and the primary care trust can be out of kilter, but the local area agreement process that we have introduced allows the council and the PCT to work together, and the previous regime did not. The second and more important point, which the hon. Lady must surely acknowledge, is that it is incumbent on the PCT, as it is on the local authority, to balance their books. There is little point having financial stability and predictability if one is simply building up a deficit in one's accounts. Against the background of increased resources, it is surely right—it is surprising that the hon. Lady disagrees—that PCTs and councils should balance their books.

Phil Woolas: I give the hon. Gentleman the assurance that local government reorganisation will not take place at the expense of the council tax payer. Unless there is a proven case that reorganisation will save money rather than cost money, it will not go ahead. I hope that he is reassured by that. I note that he said that the reorganisation was what his local authority wanted. I repeat for the record that it is not my proposal.
	On total grants, I confirm that the Governmentwill provide for £65.8 billion in 2007-08, an increase of £3.1 billion or 4.9 per cent. over 2006-07. Within that total, formula grant, which we are debating today, will total £25.6 billion in 2007-08, an increase of 3.7 per cent. All of the increases that I have quoted are on a like-for-like basis—this is the important point that the House has just been debating—as they are adjustedfor changes in function and financing. That is an important point, because several of the representations that I received—I suspect that the same applies to hon. Members—were on that point.
	I shall expand a little further. A simple cash difference in the amount of grant that an authority receives from one year to the next is no doubt a useful figure, but it is not the whole story. That is because from one year to the next we may ask local government to take on a new task, or drop an old one, or to transfer the financing for an existing function to a different body or a different financing route.
	To take the most dramatic example of recent years, the introduction of dedicated schools grant from 2006-07 meant a large reduction in cash terms in the formula grant received by education authorities compared with the previous year. However, that would not have been a sensible comparison, because previously they were also receiving DSG, so we adjusted the comparison for formula grant purposes to reflect that.
	This year, the main adjustment is for something rather less obvious. When we introduced multi-year settlements, we needed also to make changes in the way support for capital expenditure is provided. Any allocations that needed revenue support through the formula grant needed to be made in advance, so that we could calculate two years' worth of formula grant. However, some capital programmes are not so predictable: for example, when expenditure is inherently lumpy with large projects, or funding is based on a bidding process. So those programmes were switched to being supported by the Government with a direct capital grant.
	The effect of that, financially, was to move the burden of borrowing from councils to the Treasury. Resources that were previously included in the local government settlement to help support borrowing were therefore transferred to the Treasury.
	To reflect that financing change, we recalculate the prior year—2006-07 in the case of the settlement that we are debating today—as though the transfer for 2007-08 had already happened. A number of councils objected to the resultant reduction in their base position and, therefore, to the fact that their cash increase from year to year was less than the adjusted, like-for-like increase.
	I believe however that councils could hardly object to the underlying principle of adjusting since, if funding were transferred into the settlement, it would give authorities on the floor a larger increase. As I toldmy right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Barnsley, Central (Mr. Illsley), I am certainly prepared to look again at the way in which the grant floor operates from 2008-09 onwards, but I will not change the basis for 2007-08.

Eric Pickles: The settlement is revolutionary, in the sense of listening to the late Enver Hoxha announcing the tractor production figures for the great Albanian republic.
	The Minister gave several technical justifications for the settlement, which I am sure that we all enjoyed, but outside the Chamber, the Government seem remarkably content about the projected increase in council tax. Their contentment is almost verging on smugness. The Minister was quoted in  The Times last week as saying:
	"It is encouraging to note that ... local authorities are driving down council tax rises".
	No doubt he had in mind the magnificent London borough of Hammersmith and Fulham, which, after decades of Labour mismanagement and waste, has been able, under a new Conservative administration, to cut its council tax by 3 per cent. However, not all authorities have the mixed blessing of inheriting a badly-run council. Elsewhere, we are seeing increases.

Eric Pickles: I will come on to this in greater detail, but the council essentially has to pick up the tab for the changes in the NHS. The hon. Gentleman has said that it is important for authorities to balance their budgets and I think that he introduced the concept of robbing Peter to pay Paul.
	Council tax will hit the £1,300 mark from April. That is the equivalent to people paying £110 a month out of their pensions or take-home pay. We are well on the way to a band D bill of more than £1,500 in a couple of years. As the  Daily Express said when the settlement was announced—I think that it speaks for the nation on this occasion—since Labour came to power, there has been
	"a wicked, cynical and pernicious drain on the resources of all of us and especially those who are least able to cope with the rise."
	As the Minister recently admitted:
	"It is not the council tax per se but the increases in council tax which cause concern."
	There has been an increase on top of an increase, on top on an increase, on top of an increase. We have heard the same weary tale for 10 years: increases piled on top of one another. We have seen increases of £59, £51, £48, £55, £74, £126, £65, £47 and £54. There is now an increase this year of £44. There has thus been an increase of £623 for an average home, although that amount is bigger for one of Labour's millionaire donors. Householders may well wonder if they would achieve better value by clubbing together and using their £623 contribution to buy a life peerage. It is a stark measure of council tax rises under the Government that an increase of 3.5 per cent. above inflation—the Chancellor's favourite measure—can produce a monetary amount that a decade ago would have required double-digit percentages to achieve. A £44 increase hits someone's pocket hard, whether it is caused by a 3.5 per cent. increase in council tax or an 11 per cent. increase. It is a big increase if someone is struggling to make ends meet.
	Labour inherited a system of council tax finance that worked. It is incredible that as recently as 1998 the Government should declare:
	"The council tax is working well as a local tax. It has been widely accepted and is generally very well understood".
	Within nine short years, the Government have wrecked that tax, as they have wrecked so much else in local government. They continue to proceed with the planning and a computer database for council tax revaluation in England. Nice neighbourhoods, scenic views and home improvements have all been targeted, as homes with such features will be subject to a hike in taxes. The hounds of the Minister's paparazzi-like council tax inspectors have dug even deeper into people's lives. In Wales, the 2005 council tax revaluation resulted in four times as many houses moving up a band as down.
	Northern Ireland has been used as a testing ground for the new price index scheme by the Labour Government, and from April, every home will charged 0.633 per cent. of the house price every year. In Scotland, a report by the Liberal Democrat and Labour Executive backs a house price index of 1 per cent. a year. Such a tax is being considered by the Lyons inquiry—we look forward to the publication of that report in March—but if it were introduced in my constituency, a hard-working family living in an average house would have to pay about £2,000 a year. The majority of year-in, year-out council tax increases are the direct result of national pay increases and unfunded burdens imposed by central Government on local authorities. Those arguments are well rehearsed, but I wish to offer the House two new ones.
	The latest addition to the list of Government schemes is the free bus pass for over-60s. Everything would be fine if only a few pensioners took up the offer, as funding for the scheme ignored past demand, and assumed a modest increase. Predictably, that assumption was wrong, and demand increased while central Government funding did not. Lord Bruce-Lockhart—the Minister's favourite Conservative spokesman—said in  The Times:
	"The free bus pass was a good idea but it hasn't been funded so it has become another pressure on the council tax bill, which the elderly cannot afford to pay."

Neil Turner: My point relates back to the concessionary bus travel scheme, and the elements of it that the hon. Gentleman said had been imposed on local governments by the Government.Is he saying that the Conservative position is not to fund those schemes—in other words, to scrap them altogether——or is it to put more money into them, so that the council tax payer does not pay for them? If it is the latter, is he giving a commitment that a future Conservative Government would fund local government more heavily than this Government do?

Eric Pickles: My hon. Friend makes his point with his customary elegance, and I do not seek to enhance his comment in any way, because he made it extremely well. On the request to guarantee the £43 million, we notice that the Minister has not rushed to the Dispatch Box to announce that he will sign the cheque.
	The importance of other settlements pales when compared with the importance to local government of next year's summer spending review, which we touched on earlier. The Local Government Association produced a constructive document outlining the funding crisis facing local government, and it includes the No. 1 problem facing local government, namely the care of the elderly. I have a prejudice on the subject because of my past experience as chairman of a social services department. Like many hon. Members present, I have seen at first hand the effects of a local shortage of dementia beds.
	The number of people aged 85 and over has been increasing rapidly in recent years by almost 6 per cent. a year, with a growth in dependency and in the complexity of cases. A quarter of over-85s develop dementia, and a third of those need constant care and supervision. Some hon. Members on the Labour Benches seem to find that amusing. If a relative of theirs ever suffers from dementia and they see the deterioration, they may find it in their hearts to be a little more compassionate.
	Further demand is generated as the NHS withdraws from service agreements, as the hon. Member for Richmond Park (Susan Kramer) noted. Nearly half of all councils have experienced a reduction in primary care trust funding for joint projects. To manage rising demands and costs, local authorities have increasingly raised the eligibility criteria. That is the most dramatic change that I have seen since I first became involved with the problem over 30 years ago. We have moved to a world where only those elderly people who are unable to perform most or all personal care or domestic routines receive support. Not surprisingly, the growing number of older people with increasingly complex needs is placing local authorities under pressure.
	Local authorities have more than doubled their spending on care for older people in the past 10 years, yet Government funding for social care has not kept pace. The Local Government Association estimates that Government funding has increased by just 14 per cent. in real terms since 1997-98. Of course, if the same group of people qualify for nursing care, there has been a 90 per cent. increase in funding for the NHS. The figure demonstrates that social care is the Cinderella service of the Department of Health, as the Under-Secretary of State for Health so rightly said last year.

Andrew Slaughter: The hon. Gentleman makes a powerful case for social care. If, therefore, a council had cut£1.5 million by tightening the criteria, sacked all 166 of its home helps, had no assessment staff and had put up the cost of meals on wheels by 25 per cent. in order to cut council tax by 3 per cent.—50p a week—would he condemn it? That is what Hammersmith and Fulham council is doing.

Eric Illsley: I can give a commitment now: we are definitely not going to pay for that, which is well off the agenda. As I said, London authorities had the money to pay for the Olympic games bid, so they cannot be doing too badly.
	One issue that affects my area is the Building Schools for the Future programme. We are looking at a huge programme of school rebuilding in my constituency. Every secondary school will be demolished and a number of them will be rebuilt. Every school place at secondary level will be—

Eric Illsley: I take the hon. Gentleman's comments on board. He and I lobbied the Yorkshire and the Humber strategic health authority on such issues. I hope that he will have the opportunity later to make those points in detail.
	I hope that the Minister can reassure us about the Building Schools for the Future initiative.
	The equal pay single status issue has been raised with the Minister on several occasions. Again, it will create huge costs for local authorities the length and breadth of the country. I hope that he will deal with that when he sums up.
	I hope that the Minister will also make a commitment to retaining the neighbourhood renewal fund because it has an impact on the other services block. It is important for a metropolitan borough such as mine, where the majority of the funding is spent on education and social services but, in survey after survey, the majority of the people ask why they cannot have clean streets and better services, recycling and so on.
	I should like to lobby the Minister on the local authority business growth initiative. My local authority will not qualify for funding from that until perhaps year three. If he removes the damping measures in year two of the initiative, will he do the same in year three, thus ensuring that the funding is still available for local authorities such as mine, which qualify at a later date simply because our rateable income from business properties has not been substantial in the first two years?

Tom Brake: Just as my hon. Friend the Member for Cheadle (Mark Hunter), who opened the earlier debate for the Liberal Democrats, thanked the police for their hard work and commitment, I shall do the same for those who work in local government—not only because my wife works there. They are more likely to receive brickbats than plaudits, and we should acknowledge that they provide vital services, which make a genuine difference to our quality of life and local environment. Local government has responded year after year to requests for efficiency savings. Indeed, it does that much more effectively than central Government.
	Unique circumstances prevail this year. The Government's White Paper, "Strong and Prosperous Communities" was published, the Local Government and Public Involvement in Health Bill and the Greater London Authority Bill are being considered, and we expect the report of Sir Michael Lyons. Indeed, we have a Government who, on the face of it, are willing to give local authorities greater responsibility in place-shaping an area.
	There was therefore an opportunity for this year's local government finance debate to jettison the bombastic references to billions of pounds of Government expenditure, above-inflation increases, the most generous settlement ever and so on in favour of a discussion that confirmed that the Government had loosened the purse strings and been willing to trust local authorities with their own finances. I regret that that opportunity has not been grasped.
	The Government have adopted the same old tired approach—I was about to say, of spraying the chamber with facts and figures, but that would be uncharitable to the Minister. He has deployed them carefully, with the deviousness of a chess grandmaster, rather than splattering them around the Chamber, disregarding all requests for changes to the formula and using headline figures that mask the reality of what is happening on the ground.
	I should like to set out some issues that have not been tackled in the debate. The comprehensive spending review affords the Government an opportunity to make good. Let us consider wage settlements in local authorities. Perhaps the Minister can confirm in his response to the debate that the increase in local authority wages is expected to be 2.5 to 2.7 per cent. What does that mean for local authorities receiving less than that in real terms? Hon. Members, including my hon. Friends, have mentioned local authorities who will be in that situation.
	What of the extra autonomy to be granted to local authorities promised by the White Paper, "Strong and prosperous communities"? Can the Minister confirm whether ring-fencing has been reduced? Of course, he cannot; instead, he will have to confirm that ring-fencing of council budgets is at record levels, and that local government is still being treated as a delivery arm of central Government rather than a tier of government in its own right. For all their talk of autonomy and greater devolution, the Government are again threatening councils with capping. Where does that leave councils that have a historically low level of taxation? What logic is there in requiring councils to re-bill if they have set a budget over the cap, when the re-billing costs are more than the saving in council tax? The Minister said that he had not yet established the exact principles in relation to capping. I hope that he will at least establish the principle that a requirement to re-bill in such circumstances would not be terribly sensible.
	How does the Government's claim of a 4.9 per cent. increase for English authorities bear up to scrutiny? The Minister's statement shows that once specific ring-fenced grants are taken into account, the increase in total formula grant is 3.7 per cent. Some councils will receive the minimum increase—my council and many others will receive 2.7 per cent.—but the adjusted grant for my local authority and others pushes the increase below that level. For instance, Sutton will receive 1.7 per cent. at a time when, as other Members have mentioned, the retail prices index is running at4.4 per cent. and inflation in local government might be higher still.  [Interruption.] The Minister expresses desperation about my remarks from a sedentary position, but I hope that he will explain why he does not agree with that point, which is made by many local authorities.
	I do not want to be too biased in my presentation of the facts, so I will welcome the significant above-inflation increase in education spending. The Minister will know, however, that because education spending is ring-fenced, councils have no flexibility, and if savings are required, those end up being made principally in adult social services. As several Members have mentioned, according to representations made by the special interest group of municipal authorities outside London within the Local Government Association—that explains why it is abbreviated to SIGOMA—the Government's failure to apply changes to the social services formula means that most metropolitan and large urban authorities will be deprived of about £250 million, putting them under great pressure. In opening the debate, the Minister talked about Members arguing over the minutiae of the formula. I hope that he was not referring to that £250 million, as it is a substantial sum.

Tom Brake: I am sure that the hon. Gentleman would not expect me to welcome the fact that his proposals would slash funding for my local authority. What is needed is a fair, transparent, open system, which allows local authorities to set the level of tax that they think is appropriate, and to pay the consequences at the ballot box, if necessary, at the next election.
	Social services are therefore left reeling from a double whammy. One could argue that it is a triple whammy, as they are also hit by fees in nursing, residential care and home care all increasing by more than 4 per cent. No doubt the Minister will say that local authorities should beat down prices in those homes. But how realistic is that? I suspect that every Member present in the Chamber will have been lobbied recently by care homes in their constituencies stating that they cannot make ends meet with the rates that are currently paid to them; in fact, private individuals are having to make up the difference in many cases. I do not think that it is realistic to ask local authorities to play hardball with care homes, many of which are on the verge of closing—if they have not already done so—because of the amount that they must pay to stay open.
	In its briefing, the Local Government Association identified many other problems that the report does not address. I do not have time to refer to them all in detail, but waste collection and disposal costs are rising at a rate of 9 per cent. per annum. The Minister would have some justification in saying that local authorities should have planned for that, given their awareness of an inbuilt increase in landfill tax. That is true, but authorities have also been hit by a substantial increase in transport costs, which are a key part of the costs of waste collection and disposal.
	There is the issue of children with severe and complex needs. Thanks to medical advances many are now surviving and leading longer and fuller lives, but the cost of an individual care package often runs into six figures. A limited number of children can have a significant impact on a local authority budget. Other Members have mentioned concessionary fares, so I shall merely say that local authorities' grant clearly does not cover the full cost and that the Government must deal with that.
	Some authorities have experienced a sharp rise in the number of short-term migrants, those resident in a local authority area for less than 12 months. In some areas, there are hundreds or even thousands of such migrants. Admittedly many are young people who may not make substantial calls on council services, but no account has been taken of those who will.
	Perhaps the most important issue is cost-shunting. There is evidence from all over the country of attempts to shift financial pressures from primary care trusts and acute trusts to local authorities. That is being done either directly or indirectly: for instance, PCTs may cut funds for voluntary associations which then expect local authorities to make up the difference. Open Door is a service that provides counselling for teenagers who are not yet ill enough to need access to acute mental health services, and may not need it if they receive counselling. A PCT has cut funding for that service without, apparently, trying to fill the gap with an alternative service. I am hopeful that it will do a U-turn, but we must wait and see.
	There are many other examples, but I shall give just a few. There is no great significance in the authorities that I selected from the pile: they were in alphabetical order, and I took the top ones.
	I am told that Durham county council is finding it
	"difficult... to secure additional funding for shared cost packages especially in relation to Learning Disabilities clients."
	Even if there is no cost-shunting, the council can see that pressures in the primary care trusts and acute trusts will stop it from expanding services. Dudley metropolitan borough council tells me that
	"planned improvements/developments have been deferred; there are particular risks around continuing care."
	Haringey council says
	"The PCT withdrew £0.4 million... for some services that were previously jointly funded."
	The costs were staff-related, but who had to pick them up? The local authority. Allerdale borough council says
	"There is only a limited relationship between the Council and the PCT",
	and that the council is finding it difficult to involve the PCT in regeneration programmes.
	All that shows that cost-shunting and the shortfalls that PCTs are having to address are already having significant effects on their funding for voluntary associations, on services and on partnership arrangements with local authorities. It is clear that that will get worse in the short term; it will not get better. I hope that when the Minister responds he will say how that has been taken into account in the settlement.
	There is no room for complacency. A 14 per cent. increase in real terms since 1997 is not a cause for celebration, although I acknowledge that it is better than the poke in the eye that local government received from the official Opposition when they were the Government and were responsible for funding local councils. Local authorities face many of the same battles now as they did 10 years ago. The words with which my hon. Friend the Member for Brent, East (Sarah Teather) concluded the debate on local government finance a little more than a year ago are as pertinent now as they were then:
	"We need a new system of local government finance that is based on fair local taxes, localised business rates, local income tax and a simple grant mechanism, without ring-fencing, passporting or capping."—[ Official Report, 6 February 2006; Vol. 442, c. 687.]
	That is what we should have been debating today. Instead the Minister has deployed—in a reasonable way, I accept—a barrage of statistics that has served only to obscure the important issues involved in this debate. The Minister promised clarity and transparency; instead he has provided smoke and mirrors, and the debate has been the poorer for that.

Andrew Slaughter: They did not even say that. They said that they would cut the council tax, and they have done so, by 50p a week— [ Interruption. ] I hear the cheers, but they were somewhat more muted than they have been when the issue has been raised previously, because what is going on in Hammersmith and Fulham is not comparable with what is happening even in other Conservative authorities. It has been described as "Porterite" and as matching the antics of Wandsworth and Westminster councils in the 1980s, when a studious attempt was made to remove council accommodation from the borough, but things have gone even further and we are seeing almost a type of social cleansing. The council is saying that it does not want community schools in the borough: one is being closed and the other threatened by having an academy opened next door. It is saying that it does not want affordable housing in the borough or social service provision—although we heard from the hon. Member for Brentwood and Ongar (Mr. Pickles) that that is a priority for his party. All those cuts will have an impact on the weakest, poorest and most vulnerable people. That is being done deliberately and cynically.
	Nor does the council want the people who serve the community. Hundreds of people—mostly local andon low incomes—are being made redundant in privatisations and service cuts. The message is clear from the Conservative administration in Hammersmith and Fulham: "If you are old, poor, in need or homeless, we do not want you in the borough. We want to model ourselves on the central London boroughs which have adopted these policies for many years." It is a cynical and deplorable move, and I believe that when people have another opportunity at the ballot box to consider whether they want 50p a week or decent services—as provided for many years by a Labour council—and the opportunity to live in a mixed community that welcomes everyone, they will not vote Conservative in Hammersmith and Fulham again.

George Young: It is a pleasure to follow my successor but one as Member of Parliament for Ealing and Acton. I recognise the expertise of the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) in local government finance and I understand his anger. When he was first elected, the London boroughs of Ealing and of Hammersmith and Fulham were both controlled by the Labour party. After six months of my party being led by my right hon. Friend the Member for Witney (Mr. Cameron), the hon. Gentleman finds that both those local authorities have had a change of control to the Conservatives. As I understand it, the Conservatives locally stood on a manifesto of reducing the council tax. They won, and they are honouring the commitment that they made.
	I listened in respectful silence to the Minister as he introduced the debate and described a revenue support grant settlement that seemed more and more remote from the one that I was looking at in Hampshire. I realised that he had lost contact with reality when, in his peroration, he described the settlement as revolutionary and then sat down. It is possible to seek to defend the settlement in the terms that he did, if one looks at it as a snapshot. If, on the other hand, one views it as a movie, as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) did, and in perspective, it is much more difficult to defend it.
	From the point of view of Hampshire, we are in the 2.7 per cent. club, which has several members. As the hon. Member for Carshalton and Wallington (Tom Brake) said, 2.7 per cent. does not begin to cover inflation, let alone the rising costs of, for example, adult social care, about which I shall say more in a moment. That low increase in the formula grant is even more difficult, as it follows a settlement for the current year that amounts to 0.2 per cent. once the one-off grants have been stripped out.
	In addition, Hampshire county council's grant for supporting people has been frozen at just below the level for the current year, so it finds itself between a rock and a hard place: if it puts up the council tax by more than 5 per cent., it gets capped; if it continues to make efficiency savings—as it will—there will still be a gap of £10 million, which the council will have to fill by making some very unpalatable decisions. It is unsustainable for the Government to continue to provide grants such as this one while still expecting rises of below 5 per cent. in council tax, with no effect on services.
	The Minister accused Opposition Members of waving shrouds, but I refer him to the report from the Commission for Social Care Inspection that was published in December. It deals with the very difficult decisions that social services departments already have to make. The report was very balanced: it paid tribute to the Government for some of the things that they have done, but it also identified real cause for concern in a number of areas. It found that a third of homes did not meet the required standards for the management of medication or operate safe working practices, and that a substantial number of home care services are failing standards on the recruitment and supervision of staff. It mentions the juggling that local authorities are having to undertake, and the fact that they are having to tighten eligibility criteria. It also notes that there are question marks about the advice and support available to clients and carers excluded from funded care.
	The CSCI report highlights five groups of people who give rise for concern: those not using council services but in need of information and support; the carers, relatives and friends who carry the cost of ever tightening eligibility criteria; those who lack choice in respect of services or the people who deliver home care; those whose service standards are unacceptably low, and those with special complex needs that are not being met. All the evidence is that the problems are going to get worse.
	Ministers respond by saying that there has been a39 per cent. real increase in funding for local authorities nationally since 1997-98, but expenditure by local authorities has had to rise by 50 per cent. in that period, in direct response to Government spending plans and to service pressures. As a result, the increase is not as generous as we are told.
	The Local Government Association says that funding from the Government for services other than schools and specific grant priorities has increased by only 14 per cent. in real terms. That contrasts with the 90 per cent. increase given to the NHS. I welcome increased investment in the public services, but one has to compare the very generous treatment given to a service for which the Government have direct responsibility, with the rather miserly funding of services for which local authorities have responsibility. That is especially important in respect of where the two services overlap, which is in social services.
	My second point has to do with damping, the mechanism introduced by the Government to prevent sharp adjustments in grant distribution as we move from where we are to where the Government think we ought to be. Is it a floor, or is it quicksand? In Hampshire, £38 million—or 30 per cent.—of our formula grant is at risk as a result of the damping mechanism. The Minister talks about the certainty that multi-year agreements will bring, but that is undermined by the medium-term uncertainty about how the damping mechanism is to unwind.
	I was not greatly reassured by the exchange at the start of the debate between the Minister and the right hon. Member for Birkenhead (Mr. Field). It would be helpful if the Minister, when he winds up, will confirm that the grant floor will be a permanent part of the formula grant allocation, and that the £38 million will not be removed.
	A moment ago, I mentioned residential care. There was a very good debate in Westminster Hall on17 January on public funding for residential care, about which hon. Members of all parties expressed their concern. It emerged that the pressure on funding means that social services now intervene only when a client reaches a substantial or critical level of need. The Joseph Rowntree Foundation estimates that care homes are underfunded by £1 billion. In the CSCI report, Denise Platt mentioned that primary care trusts and local authorities are increasingly withdrawing from pooled budget arrangements, owing to pressure on funding. Prevention and early intervention are being squeezed out. We need a step change in funding for those services if the quality of care that we all want to see is delivered.
	The Minister might care to read what his colleague, the Under-Secretary of State for Health, the hon. Member for Bury, South (Mr. Lewis), said about his aspirations when he wound up the Westminster Hall debate. The hon. Gentleman said:
	"The first point is that older people in this country are entitled to be treated with dignity and respect. They are a generation that worked hard to build this country, and a fundamental sign of a civilised society is the way in which it treats older people."—[ Official Report, Westminster Hall, 17 January 2007; Vol. 455,c. 331WH.]
	Can the Minister tell us whether his colleague's ambition will be realised if we continue down the path of underfunding for social services that I have described? The number of people with learning disabilities is increasing by 2 per cent. a year in Hampshire, and as care packages become more sophisticated their cost is ever higher. The funding formula does not recognise that need.
	My final point is about the sustainability of the system by which we pay for local government. The council tax is like an old bridge with a weight restriction. It was designed to carry the pressure of council tax bills of three figures, but not of four, so it is creaking. There is something unsustainable about the regime we are being asked to approve this evening. On each occasion, the Government defer a difficult decision, but the time for drift is coming to an end; it is time that the Government took a grip on local government finance and found a sustainable way of funding it which recognises the responsibilities that fall on local government. I hope that in a year's time we shall have a different debate—one with a greater degree of realism.

Neil Turner: I apologise to you, Mr. Deputy Speaker, and to the Minister for not being in the Chamber at the start of the debate. I was elsewhere in the House at a Committee meeting.
	The settlement is broadly good in historical terms. The Local Government Association briefing of 31 January notes that most authorities will receive a higher grant increase than in 2006-07 and that there has been a real-terms grant increase of 14 per cent. between 1997 and 2007-08, although I realise that the Government dispute that figure and say that it is actually nearer29 per cent., when education is excluded.
	We need to compare the settlement with the years of Conservative Government, when there were cash cuts year on year and the grant was fiddled to ensure that it went to Conservative-controlled local authorities. When the hon. Member for Brentwood and Ongar (Mr. Pickles), the Conservative spokesman, responded to my intervention, it was interesting that he gave no indication whatever that if the Conservatives were in power they would give more money to local government.
	Local government can take no comfort at all from Opposition Front-Bench Members. They complain about the problems, but they offer not a penny piece extra. When the hon. Member for Brentwood and Ongar winds up the debate, I challenge him to give an undertaking to put more money into local government to get rid of the some of the problems he outlined.
	The legacy of Conservative Government remains. Local authorities with measurable needs are not yet receiving the grant agreed under the central Government formula, because the Labour Government have done what the Conservative Government did not do. The right hon. Member for North-West Hampshire (Sir George Young) complained about floors and ceilings, but I do not remember him supporting councils such as Wigan when we were experiencing yearly cash cuts of £10 million, £8 million and £12 million. I do not recall Conservative proposals for a floor on the amount of reduction. The Government have implemented such a floor and I very much support it, because without it local authority finances and services would be destabilised. The floor is an important part of local government.
	If we are to ensure that the Government achieve what they want, which is to tackle deprivation and need, I strongly argue that local authorities have a major part to play. The only way they can do that is if we make sure that they get the amount of money that the formula says that they are entitled to. When the Minister comes to the comprehensive spending review settlement for the next three years and the grant, I urge him to reduce the floor and increase the ceiling so that we can more rapidly move towards local authorities getting the amount of money that they are entitled to.
	My hon. Friend the Member for Barnsley, Central (Mr. Illsley) is not in his place, but he properly raised the issue of the amount of money that has been damped out. The hon. Member for Carshalton and Wallington (Tom Brake) mentioned the amount of money that has been damped out from social services because of the double damping figure. That is extremely important, particularly in SIGOMA areas. The figure is something like £250 million. I was disappointed that the Minister did not feel able to take cognisance of that and make some changes to the grant to recognise the fact that that is the case.
	It is a double whammy for us. Not only are we getting the double damping, but in general, our primary care trusts are underfunded by comparison with the amount of money that the health formula says that we should get. I think that the figure is £8 million to £10 million when it comes to the grant that we have lost in relation to the local authority and £11 million in relation to our primary care trust. That means£20 million has been taken away from Wigan—largely within social services. That extends right across a range of local authorities that I represent in the SIGOMA group. That means that there will be a postcode lottery for social services provision. Some social services departments will be able to provide services for free. Others will charge and others will not provide the services at all. The Minister has to address that issue when he thinks about the grant for the next three years.
	The debate has highlighted one of the difficulties that having a three-year settlement will produce. If we have a three-year settlement and there is something wrong in the figures, local authorities have to deal with that, because it will not be sorted out over the next three years. In a spirit of helpfulness, I put it to the Minister that we should look seriously at perhaps top-slicing part of the grant to local authorities so that there is a pool of money available to central Government. That would mean that, if there were problems—because of non-recognition of the indication—it would be available to him to correct the anomaly. If there were no anomalies and local government was reasonably satisfied with the way in which the formula had been sorted out and with the amount of money that it was getting, that pool of money could be put back into local authorities over the following year. The proposal does not involve taking money off local authorities; it involves putting money into a pool that can be used to sort out problems, if there are any, and given back to local authorities if there are not.

Paul Beresford: I congratulate the Minister on his speech. One of his predecessors, whom I will not name, had a tendency to present his case in the form of a triumphant speech. However, the Minister has been a little more constructive, so I hope that he will get a more constructive response.
	I am sorry that the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) is not in the Chamber. I was going to remind him that he would find that the allegations that he made against Hammersmith and Fulham council were made against Wandsworth council. However, the populace has backed that council and it and the Government have backed the services. The hon. Gentleman should realise that judging the quality of a service by the amount of other people's money that is spent on it is not a good approach.
	I want to touch on two issues, hopefully constructively, although it is worth setting the scene first. The result of the motion will be that most of the south-east county councils and two thirds of the London boroughs will be on what the Minister calls the floor. They will see "the floor" in the same sort of terms as the Deputy Prime Minister would: as a boxing phrase, not a dancing phrase. The assumed inflation figure of 2.7 per cent. is not the reality for many of those councils for the reasons that we have heard.
	The stark reality for Surrey county council, which is on the floor—the boxing term—is that only 15 per cent. of its £640 million budget will be met by grant. Given the inflation costs that it expects to face, rather than the 2.7 per cent. figure, it reckons that it will need a tax rise of 8.6 per cent. Fortunately for council tax payers, if not necessarily service recipients, the council will reduce its budget by about £11 million and, I hope, get the increase below the assumed cap of 5 per cent.
	As we have heard, social services, especially residential homes and care contracts, are the real problem. Throughout the area, we have the problem of cost shunting and high-volume output to the community from acute hospitals and primary care trusts. Most London and south-east PCTs are in deficit. Every single Surrey PCT was in deficit, and after they were combined into one PCT, all the deficits were generously combined into one very large one. We have been warned that there will be cuts. One of the difficulties is the difference between the way in which the Ministers' Department and the Department of Health examine the needs indices, especially those for the elderly. Some 13 London councils' PCTs are in financial deficit, so they are facing the same problem, and many councils are facing an enormous struggle. Brent council complains that cost shunting from its PCT will cost it about £9 million, which represents a considerable budget shift.
	Although I have hammered on at Ministers about this over the years, the Government have only just started to learn that they should take away the leverage of central controls, targets and bureaucratic demands on local government. That is essential. One of my little councils, Mole Valley district council, has a tiny budget of about £10 million. However, its last comparative performance assessment cost £250,000, which, due to gearing, added £1 million to the council tax. While the Government are starting to move, tricks can be carried out involving smoke and mirrors—there could even be a three-card trick. Ministers talk about reducing the number of indicators from between 600 and 1,200 down to 200.
	May I focus on the local area agreement, about which there has been a great deal of talk. The original proposal was for a local scheme with little central control, but I hope that the Minister will look at it, because it has become a monstrosity. There are 180 pages of guidance, and statutory duties and ministerial powers of intervention are to be introduced. There are 60 targets, extensive six-monthly reports on the targets to Government officers and a huge raft of bureaucratic procedures for local partners. The Minister looks a little puzzled, so I will not continue with that list, but the problem does not concern his Department alone. The Department for Education and Skills has more than 150 targets for children; the Department of Health another 100 or so for adults; the Department for Transport has its own set of targets, as does the Department for Environment, Food and Rural Affairs. Having just been hit with a demand for tax because it is the end of the tax year, I am sore that excessive numbers of civil servants are dealing with what is produced with excessive numbers of bureaucrats in local government, especially as local area agreements do not provide any real results on the streets.
	I urge the Minister to consider the points that have been made by Members on both sides of the House about the care of the elderly and the mismatch between the NHS and local government. He may smile at my next request. He and I have both mentioned his favourite local authority. I urge him to take a deep breath and come with me, without officials or anything else, to listen to the people at the front line of what, I believe, is one of the most efficient local authorities to learn what could be done to take the bureaucratic load off local government and still give central Government what they want. It would be good business, and because of gearing it would have a dramatic effect on council tax. Will the Minister accept the challenge?

Mark Prisk: It is a great pleasure to follow my hon. Friend the Member for Mole Valley (Sir Paul Beresford), who touched on one or two points that I wish to make. I shall therefore try to abbreviate my contribution accordingly.
	May I begin by praising the work of many local authorities? Whether at parish, town, district or county level, councils often provide crucial services. They educate the young, provide care for the elderly, keep the streets clean and often help to keep our communities safe. I suspect that everyone in the Chamber has criticisms of certain decisions or oversights, but local councils employ thousands of unsung heroes who, day after day, make a real difference to our constituents' lives. Local councils, however, often have to make difficult and unpopular decisions. On waste management, for example, it is local authorities that make the difficult decisions on the ground. Local government therefore deserves a financial settlement that fully reflects changing needs and rising expectations.
	As we have heard, Ministers claim that local government has received a generously funded settlement since 1997, and they cite a real-terms increase approaching 40 per cent. Once we strip out all the ring-fenced grants, not least for education, the increase is, as we heard earlier, just 14 per cent. in real terms. In other words, there has been a measly 1.5 per cent. per annum in the past nine years or so. In Hertfordshire, our general grant has increased in cash terms by 52 per cent. over the past10 years. Some 46 per cent. of that increase has been required simply to cover inflation and Whitehall-led changes in formula and functions. As a result, our councils have received only a 6 per cent. increase over10 years to cover other cost pressures, including, as we have heard, the rising burden of care for the elderly.
	At the same time, the Government have piled new statutory responsibilities on to councils, tying them up with targets and red tape. Like my hon. Friend, I looked at some of those targets. Since 1997, Ministers have, between them, generated 1,500 performance targets, 734 objectives, 273 measures, 183 aims, 66 value-for-money targets, and 11 standards of maintenance, so they have been rather busy, as we can see. The problem is that the cost resulting from all that frenetic activity has proved to be hideous, both financially and in terms of lost time.
	The background to today's financial statement is one of rising prices. The consumer prices index stands at3 per cent., and the retail prices index at 4.4 per cent., but energy costs, for example, are rising by well in excess of 10 per cent. Despite rising prices and costs, my authorities, Hertfordshire county council and East Herts district council, have been offered just 2.7 per cent. The settlement completely fails to take into account the real costs of their services. Take the county council; inflation alone will mean £19 million in extra costs. A deliberate pattern has been woven into the settlement. The Government either take decisions that result in new duties for councils, or make settlements that increase their costs.
	The county council has experienced a rise in landfill tax, which will cost it another £1.8 million. We heard about NHS cost-shunting earlier, and the NHS is being squeezed in Hertfordshire, too, with many care costs being pushed back on to the county council. Our county hall reckons that that is another £2 million in the coming year. The Government made a proud boast about concessionary fares for the elderly, but the scheme comes without full funding, a fact that we debated earlier. The result is that East Herts district council will have to find more than £730,000 next year for a deal over which it has absolutely no say. Every year, both councils continue to pay for the Chancellor's decision to raid pensions by scrapping advance corporation tax relief. The result for the county authority is another £1.5 million of expense.
	Sadly, the current financial settlement is a classic example of the way in which the Government treat our councils. They give them more jobs, but keep back the money. They announce generous settlements, but get council tax payers to pick up the tab. However, it is not just the Government's actions that cause problems. They have failed to acknowledge and respond to the changing social demands in our communities. On social care, for example, there is a rapid and continuous increase in the size of the elderly population. That group's needs and expectations are, of course, considerable. In Hertfordshire, the increased number of adults who need essential support is projected to add another £10 million of cost, next year and every year.
	Care costs are projected to increase by as much as6 per cent. per placement, due in part to new Government standards. I do not doubt that, as the Minister will claim, good intentions lie behind those standards, but I am deeply concerned that those intentions are not accompanied with the money that is needed to make them work. The irony is that good, efficient authorities do not seem to be rewarded. According to the Government, Hertfordshire county council is an efficient authority. It has exceeded its Gershon efficiency target and has made cashable savings of £70 million in 10 years, and it intends to keep to the prudent path. However, because Hertfordshire is a floor authority, its ability to borrow in the way that it thinks best is severely limited.
	In Hertford, the Richard Hale school has led an excellent campaign to build a desperately needed sports hall. The scheme has cross-community support and would benefit both the town and the school. Indeed, the county council would like to support it, if it could, but it tells me that because of Government rules on borrowing for floor authorities, it simply cannot help the school next year. Its hands are tied. Where is the logic in that? Why tie the hands of good, efficient councils in that way?
	The financial settlement is part of a broader pattern. My councils have had their duties increased, and their costs have risen. Their wage bills have been increased for them, and their tax bills have been raised. At the same time, the Government have switched funds away or tied up projects in endless red tape. The result is that council tax bills have soared. Since 1997, the average council tax bill for my constituents has risen by 84 per cent., so that is an 84 per cent. increase for what is essentially the same service. This huge increase is especially unfair on those on fixed incomes, such as the elderly. They cannot hope that a pay rise will bail them out. Instead, they feel they have to cut back on other things to pay a tax that they increasingly resent. It might be their heating, or a birthday present for a grandchild. That is the price of the Government's policy.
	Ministers should realise that my constituents know exactly where the blame lies. Although all councils must strive to be more efficient, the Government also have a duty to provide a fair settlement which does not switch our funds away without good reason, matches funds with new responsibilities, and does not stop good councils backing projects that are valued in the community. That is what my councils and our taxpayers are seeking, and it is what they deserve. I regret to say that that is not what the Government are delivering.

Lorely Burt: The hon. Member for Mole Valley (Sir Paul Beresford) said that his local authority was on the floor. That is an appropriate description. My local authority, Solihull, is on the ropes and on the floor, having to cope with £7 million worth of cuts this year, as it did last year, with more to come.
	I am grateful to be called to speak in this short debate, because the constituents of Solihull feel a deep sense of anger at the settlement that we have received this year. Some Labour Members—there are not many in their place—may think that somewhere as posh sounding as Solihull does not need a big settlement, and that people there earn more, live in big houses and somehow deserve to be left short of income. Solihull is often referred to as the posh bit of Birmingham—a place where Brummies aspire to move out to—but the borough of Solihull contains four out of the 10 per cent. most deprived areas in England. Even in the more affluent parts of the borough, the need for services is great.
	Solihull has 16 per cent. more elderly than the national average, or indeed the average for next-door Birmingham. One third of those aged 85 or over need intensive care. Every year Solihull gets the lowest education grant of all the metropolitan authorities, and every year the council overspends its budget for the most vulnerable— for care for the elderly and for children.
	The Conservative-run council has tried hard to balance its books, making hugely unpopular decisions like cutting music services for children and even shutting the public toilets, which caused a public outcry. Visitors, the elderly, parents with children and people with medical conditions cannot go to a public loo to spend a penny. Toilet talk may have its humorous side, but the toilets were closed to save just £220,000, and that is no laughing matter.
	To get some investment into the borough, the council has complied by introducing an unwanted and unneeded red route, costing over £4 million. That is£4 million of Government money, so it is said, but in reality it is £4 million of our money, our taxes, misused in useless Government projects when the money could and should have been better spent on children and the elderly.
	Solihull is the lowest funded metropolitan borough council in England, and perhaps it should be. Other areas have greater social deprivation overall than we do. But does the Minister agree that in an attempt to redress social deprivation, we have got things slightly out of proportion? Solihull is destined to receive a grant allocation this year of £243.79 per head of population. Next door in Birmingham, the allocation is £582. That is 2.4 times as much.
	With a rise in grant of just £1 million, Solihull is bracing itself for major cuts to services, major redundancies, and major losses to everyone of facilities and services. For every £1 per head rise in Solihull, Birmingham gets £17. I do not get it, and I am afraid that my constituents do not either. Can the Minister explain how anyone can work out that a borough with four of the most deprived wards in England, a disproportionate share of elderly people needing care, children to educate, social services to provide, roads to maintain, bins to empty, and so on, can do that on40 per cent. of the grant of the borough next door and only 53 per cent. of the national average?
	The choices for Solihull are stark. Our officers are to be commended that Solihull has achieved an overall three star rating on efficiency and performance, but what is the point in performing so well when you get kicked in the teeth by being starved of funds? With£7 million pounds of cuts to find, the days of belt tightening are over. Even by raising council tax by the maximum possible without being capped, there is no surplus fat to cut, so we are talking amputation time. Perhaps the Minister will explain to my constituents and to those who run the council just how we are to maintain our basic services; and, since we clearly cannot, who should lose out—the elderly, the children with special needs, the environment, or what? Could we have a review of proportionality in setting the formula? We are only asking for fairness and reasonableness. We paid the taxes in the first place; we would just like a little bit more of them back .

Graham Stuart: I should like to discuss the situation in the East Riding of Yorkshire, where the local government finance settlement is a tale of light and dark—of community champions fighting community betrayal. It is a tale of outstanding success and outstanding performance by the Conservative-led East Riding of Yorkshire council set against the abysmal waste and systematic abandonment of vital rural services by a corrupt and failing Labour Government. The results of this Labour ineptitude, not to mention gerrymandering, are broken care, lost opportunity in our education system, and suffering by the old, the weak, the ill and the poor. Truly, this is a tale of the good, the bad and the ugly.
	I will start with the good—it is a delight for me to do so—by congratulating East Riding of Yorkshire council, which is led by the Conservatives and has been transformed under Conservative leadership. In 1996, when East Riding of Yorkshire council was formed, it had the fourth highest council tax in England. In 2006, it had fallen to 245th out of 356. It had a four star rating for benefits in the 2005 English council league, which made a real difference to those with least—as, I am proud to say, Conservative councils so often do around the country. In education, the council is in the top 20 per cent. of performers. It is 17th nationally for GCSE results, with 61 per cent. of pupils achieving five A to C grades compared with 54 per cent. nationally. There has been a tale of continuous improvement in that respect.
	The council has a record of extremely good financial management. Last year, it was regarded as one of the three financially best run councils in the country. I am delighted to share with the House the fact that this year it has been made top council in the country in terms of financial management. It has delivered the highest possible score in all areas of assessment: financial reporting, financial standing, financial management, internal control, and—the issue with which I am most proud to be associated—value for money. That is what Conservative leadership has delivered in the East Riding of Yorkshire. In Conservative hands, East Riding of Yorkshire council delivers the best value for money in the entire country. I know that when the electorate are given the opportunity in May, they will seek to re-elect those successful councillors and, I sincerely hope, add to them. That is a tale of outstanding performance by the Conservative-led council.
	Now we come on to the bad. Here we have a sustained assault on our rural schools through Labour underfunding. We have a sustained assault by Labour on rural NHS beds, with a proposal to close every single one in my constituency. If the primary care trust's preferred option goes through, the nearest NHS beds for intermediate care of the elderly will be based in Goole and Bridlington—an hour and a half's drive away from where people live in villages around Withernsea, Hornsea and Beverley. That is just one way, so we are talking about a return trip of three to four hours—if, of course, people have a car in the drive, but Withernsea is one of the poorest areas in the East Riding of Yorkshire and one of the poorest in the country. It is going to lose every NHS bed and I pay tribute to the GP surgery, which has been fighting against the cut imposed by the PCT appointed by the Secretary of State.
	If the Minister asks what relevance this matter has to the local government finance settlement, he should know full well that it is because of the impact on social services. It is because the East Riding of Yorkshire, an outstandingly well run authority, has none the less struggled to deliver care. Last year, there was just a2 per cent. increase in the money available for either domiciliary care or care homes. That put care home owners under complete pressure. When challenged, the East Riding of Yorkshire council told me that it accepted that what it was being asked to do was unreasonable and that it could not be expected to do it.

Graham Stuart: My hon. Friend is quite right to point out that inflation is running at higher than the standard rate in many areas, which has often been stoked by the Government's behaviour.
	Labour has been running a sustained attack on rural schools and rural NHS beds, as I said. We are also losing rural dentists. Under the new contract, two out of three dental surgeries in Hornsea closed. There is also a sustained attack by Labour on post offices, with an announcement that thousands more are at risk. Labour has launched a sustained attack on the funding of social care and there has been a sustained failure to support transport. Not only does Yorkshire receive an unfair share of the transport cake, but my constituents were shocked to learn that of the money given across Yorkshire last year, 85 per cent. of it was deemed by the Government to have the greatest need, funnily enough, in Labour-held constituencies. I repeat the figure of85 per cent.—although Labour holds only half the constituencies in Yorkshire. If we consider the land area covered as well, my constituents will draw the right lesson from that. I pay tribute to the  Yorkshire Post for its sustained campaign on the Government's failure to provide proper transport infrastructure— [Interruption.]

Andrew Pelling: I am sorry that I was not present in the Chamber for the start of the debate. I was lobbying the Mayor of London for money for my constituency.  [Interruption.] I had a positive meeting.
	Clearly, the council tax system, which stands behind the local government settlement, is now untenable. Many of those who will pay increased charges—particularly in London, where the tax is due to increase by 5.7 per cent.—will struggle, especially those senior citizens who wish to stay in the family home.
	I was pleased to hear the Minister talk about the work of the ONS on the issue of migration flows and the calculations that will be made. That applies particularly in my constituency, as it is the base for the immigration and nationality directorate. From my casework, I have the perception that the population to be served by local government might be as much as 40 per cent. larger than that measured by the old census figures.
	Previously, when I have raised the issue of the good treatment or otherwise of Croydon in the settlement, the Minister's response has been robust, if not aggressive, in referring to local enterprise growth initiative funding. Nevertheless, that money is for rejuvenation, and should not be applied through the local government settlement. In the past, Croydon was slow in lobbying the Government about the area cost adjustment, and the way in which it affected different boroughs in London. Croydon ended up being in the other outer-London group when a west London group was set up. As the hon. Member for Carshalton and Wallington (Tom Brake) is in the Chamber, I pay tribute to the London borough of Sutton, which was rather more adept at lobbying on the issue than Croydon. The cost to Croydon has been £15 million a year in grant over the three-year period. I very much hope that the settlement working group work programme will consider closely the issue of area cost adjustment geography, which has a real impact on the allocation of moneys to a place such as Croydon.
	For many London boroughs, certain issues are particularly challenging. In my earlier intervention on concessionary fares, I mentioned that the demands on Croydon are increasing by £862,000 a year, which is an 8.3 per cent. increase. I should have said that that is before the impact of any changes to the national scheme in future years. Because of migration issues, Croydon faces particular problems in relation to asylum and its costs. We face a shortfall of £4 million in that area, as well as a shortfall of £3.8 million in the area of learning disability. We also face challenges in dealing with the issue of single status, as do other local authorities. Following approaches from boroughs, the Minister's Department has agreed that there should be a capitalisation of many of those costs. Within the limited amount of overall capitalisation allowed across the country, however, it is likely that there will be little real impact on the extra provision and flexibility allowed.
	I am aware that we are tight on time, so I shall speak for just one more minute. I should like to return to the issue of asylum seekers and its effect on the budget of the London borough of Croydon. While strenuous efforts are made by Croydon and other London councils to alleviate the burden placed on them by the cost of asylum, several areas still need to be addressed. Thereis a lack of overall financial provision for post-16 to18 age groups. Even where there is such provision, payments are not made within a reasonable period. That has been addressed by the Home Office for 2006-07, but outstanding issues in prior years remain, going back to 2002-03. I am sure that almost all Members would regard that as an unsatisfactory approach. The funding methodology used by the Department for Education and Skills is even more bizarre. Shortfalls go back to 2004-05, which must make planning very difficult for councils, quite apart from the impact on cash-flow management.
	There is also a failure to address the support needs of asylum seekers with special needs—both while they are awaiting determination of their asylum applications and following a negative decision—as well as the support needs of others who are subject to immigration control and have no other recourse to public funds.
	I have exceeded my minute. I hope that the Minister will be able to reassure me that he is listening to Croydon's case, which I think has been put in a rational and constructive fashion. The borough faces real challenges: for instance, it receives £40 million less per resident than Ealing.

Susan Kramer: I am conscious that the Minister must be given adequate time to respond to the debate, so let me cut to the quick of my comments. I want to address the needs of south-west London. I shall talk specifically about one of my two councils—Richmond upon Thames. I know that my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) was going to address Kingston issues, and I shall mention them only in passing and look for another opportunity to raise them with the Minister.
	As the Minister knows, Richmond upon Thames is the lowest-funded borough in London. The numbers that I have heard mentioned in this debate for other councils would leave Richmond in clover. The relevant sum for Richmond is £127 per head in 2006-07, which is £57 lower than that for the next lowest borough in London, and it will be £60 lower for 2007-08 because, as I said in an intervention, Richmond's budget will be cut in the 2007-08 round. In saying "cut" I am using exactly the standard that the Minister asked for: comparing on a like-with-like basis year on year.
	The Minister said, "You must look back over a 10-year period", but 10 years ago the base for Richmond was wrong. What was a small number then has become magnified year on year to a number today which I believe even he and his senior officials would recognise is totally out of kilter. Although Richmond is different from other boroughs in that it is well-to-do, it is not that different from neighbouring boroughs. That number is now completely disproportionate in comparison with those for other boroughs.
	For Richmond, only 19 per cent. of local council expenditure comes from grant. It has a very high council tax to deal with that situation, but it is also the lowest spending authority in London—it has the lowest expenditure per head. That demonstrates that it is a borough with no fat to cut, and with the additional burdens that have been described as a result of NHS cost shunting, adult care costs and special needs for young children, the pressures are becoming intolerable.
	Both Richmond and Kingston, the two boroughs that I know best, have a reputation for doing very well for children with special needs. Obviously, the education budget is picked up within the schools budget, but the care that such children need comes along with that, and the responsibility falls on the local authorities. We have good anecdotal evidence—we do not yet have hard survey evidence—that, because their reputation is so good, people are moving to the borough to take advantage of such care, thereby throwing more and more cost on to the local authorities. In Kingston, the same thing is certainly happening with social care. Frankly, the boroughs' needs are therefore acute.
	In the last minute that I shall take, I want to make a special plea for the south-west London boroughs as a whole. I ask the Minister to meet them collectively to look at their problems. The amount of revenue support grant that they receive collectively is far lower than that received by others. Only 35 per cent. of their collective expenditure is funded by grant, and they collect over £100 million more in business rates than is returned to them. Kingston, for example, pays far more in business rates—some £67 million a year—than is recovered in various grants collectively, which is about £32 million. The resource allocation has become completely out of kilter.
	When I raised this issue in an intervention, the Minister smiled and with a slight snicker mentioned that Richmond upon Thames has developed a car parking charging regime to hit gas guzzlers, thereby implying, as many do, that it is a leafy, wealthy suburb. The elderly in our boroughs need care just as much as the elderly in any other. Children with special needs in our boroughs need care just as much as those in any other. The attitude that such places are leafy suburbs and should therefore only provide—that their needs do not have to be taken into consideration—is generally unacceptable. It has begun to irritate people beyond the point of tolerance to hear those sentiments constantly expressed. I thank the Minister for listening.

Phil Woolas: I apologise at the outset to Members in all parts of the House if I cannot answer the specific questions that some have raised on their constituents' behalf. I of course understand why Members have made their special pleas, as well as their more general points, and I shall try to answer as many of those questions as I can.
	I want to begin by painting the bigger picture. Underlying this debate has been the assumption that the Government's grant settlement should fully fund the inflationary pressures on local government. Indeed, the hon. Member for Hertford and Stortford (Mr. Prisk) said that the settlement should fully reflect changing needs and demands. Of course, that is a desirable wish list, but the difficulty that the Government would have under any circumstances, were that approach to be accepted, is that it would simply fuel the very inflationary demands that councils face. One cannot possibly base a local government finance system that has distributed more than £60 billion on that premise.
	I turn to the 14 per cent. figure given by the Local Government Association, which has been quoted in order to point out the difference between schools and non-schools funding. If one takes into account the full grant allocation, the figure is 29 per cent. in real terms. Of course, one can always make use of statistics, and the LGA acknowledges that this is an above-inflation figure. However, the social care issues that have been raised are of course extremely important.
	The hon. Member for Brentwood and Ongar (Mr. Pickles) said that the council tax would go up as a result of home improvements, of having a nice view and of living in a nice area. Let me try again to scotch this rumour. Council tax, like the rates before it, is a value-based tax, so it is already inherent within it that, where there is a relative advantage in property value, a higher tax band rate is paid, other things being equal. There are no plans to change that, despite the excellent cost-saving computer that the Valuation Office Agency has. In Northern Ireland, another scaremongering story is put about. The changes there were instigated by the Northern Ireland Executive, not the Government, and are bringing Northern Ireland from a rental-based system of property tax to a capital-based one. It is indeed Northern Ireland that is following England, rather than the other way around.
	The hon. Gentleman mentioned Scotland and an executive report from the Labour-Liberal Democrat Executive. In fact, it was an independent report that was, on the whole, dismissed by the Executive within minutes of being published, at least as far as the point systems were concerned. He tried—as have others—to paint the picture that the concessionary fares system is unfunded, but he cannot have his cake and eat it, as much as he tries. He cannot say that we should move towards less ring-fencing—a policy that we support—and then argue that specific grants should match pound for pound. It is not the Government who set the bus fare, but the bus company. Local authorities asked for a formula-based distribution of funding and we provided £350 million. None of the councils thatwere positive winners as a result—which included the councils of those hon. Members who mentioned this issue—said at the time that they did not like that distribution. The fact is that the Government have now provided another £250 million for a nationwide scheme.
	On licence fees, the Licensing Act 2003 is a devolutionary measure. Again, the Opposition cannot have their cake and eat it. When the Leader of the Opposition attends the Local Government Association conference and promises an end to all ring-fencing, Opposition Members cannot criticise us when we do the same.

Phil Woolas: No. The hon. Gentleman had his say, and refused to give way to me earlier on this point. I acknowledge the point about the damping floor. I have not been able to make changes in this settlement, but I shall look at the matter again.
	The right hon. Member for North-West Hampshire (Sir George Young) asked me for confirmation about the permanence of floors, of which there are two types. One is the overall floor, from which I think that his county benefits—although he said that he wished that it was not a floor authority. The second type of floor includes those within social services, which will be taken into consideration.
	The hon. Member for Mole Valley (Sir Paul Beresford) made some powerful points about cost shunting and the inflationary pressures faced by local authorities. He talked about the targets for the local area agreement, and said that there was a fear that the agreement could become too bureaucratic. I agree, and invite him to support our Local Government and Public Involvement in Health Bill. He voted against it on Second Reading, but it achieves exactly what he asked me to achieve by means of the funding system.
	My hon. Friend the Member for Barnsley, Central, like his colleagues from SIGOMA, spoke about double damping and the billion-pound business rate funding. He asked about equal pay for equal value, and I refer him to the Government's recent statements on that subject.
	The hon. Member for Carshalton and Wallington (Tom Brake) described me as a chess grandmaster—not a description that would be recognised in my household. He criticised the Government about the wage settlement, but I remind him that local council wages are agreed by councils, and not by the Government, so his criticism was unfair. He said that he wanted a local tax, thereby confirming a Liberal Democrat policy that I consider to be unworkable.
	My hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) made some strong criticisms, and there was an exchange about Hammersmith. I believe that that has changed the whole debate—
	 It being six hours after the commencement of proceedings on the Police Grant Report motion, Mr. Speaker  put the Question, pursuant to Order [24 January].
	 Question agreed to.
	 Resolved,
	That the Local Government Finance Report (England) 2007-08, House of Commons Paper No. 231, a copy of which was laid before this House on 18th January, be approved.

Colin Challen: I am grateful to have this opportunity to raise the issue of armed forces pensions in this debate. It follows the launch of my early-day motion 67, which has now been signed by well over 100 hon. Members.
	I have been contacted by constituents who served in the armed forces before April 1975. They feel aggrieved at being denied a service pension, even though they had as many as 21 years' service in the forces. The rules have since been changed to allow servicemen and women with fewer than 22 years' service who retired after April 1975 to obtain a pension.
	Many of the former members of the armed forces who have contacted me are now at retirement age and feel bitter that they have got nothing to show for their often dangerous occupation. I have a letter from my constituent, Mr. Hutchinson of Morley, who wrote to me and said:
	"I joined the Royal Navy as a boy second class in December 1927 and served until after the end of the 2nd World War, being released on December 1st 1945 as a Chief Yeoman of Signals. The reasons for my not continuing to serve for the full man's time of 22 years were the protracted periods away from home and the fact that I did not see my baby daughter until the war was over and she was then 17 months old."
	Another constituent, Mr. Sid West, told me of his17 years in the Army. If he had retired with 22 years' service he would have left in 1978. It is strange indeed that had he been prescient or lucky enough to remain for even 20 years, he would have received a service pension. There are thousands in that position.
	I should declare a minor interest, as if the rules were changed again even my three years' service in the RAF until 1974 might qualify me for a penny or two. However, if my right hon. Friend the Minister of State responds positively to all my requests this evening, I shall gladly donate to charity whatever comes my way.
	From the response to a parliamentary question in March 2002, I understand that it has not been the policy of successive Governments to make retrospective changes to pension provision. The reason given is usually the enormous cost. However, there is no hard and fast rule that the policy should remain. What is the Government's estimate of the cost? Would not agreeing to a change build on the work of a previous Labour Government?
	In the difficult economic times of the mid-1970s the Labour Government made the first progressive rule change to lower the qualifying period. We had inherited a crumbling economy from Ted Heath, with balance of payments deficits, sky-high inflation and public spending that caused concern—at least to the International Monetary Fund. However, let us look at the economy now; we may still have balance of payments deficits, but that is about the only comparison with 30 years ago, and we no longer seem to think that they are a problem. We are the fifth richest country in the world.
	We must find out what it would cost us to do better for veterans who retired before 1975 with fewer than22 years' service. Previous answers to my parliamentary questions have shown that we keep detailed records about those who served and their length of service, although pay records are destroyed after seven years so it would be difficult to ascertain some of the facts, but we should try to address the issue.
	It is true that veterans with nine or more years' service were paid a gratuity in lieu of further entitlements, which would naturally have to be factored into the calculation and would reduce the amount of pension paid. However, to be candid, at a time when we seem determined to build a replacement for the Trident system, with an estimated cost of anything between£16 billion and £70 billion, we should recast our priorities.
	It is often said that the mark of a civilised society is how it treats its elderly. I have never heard it said that the mark of a civilised society is that it should spend huge sums of money on weapons of mass destruction. In the 1970s when the Government spent billions on the Chevaline nuclear upgrade system, many people probably thought that with the cold war in full swing it was money well spent, but now we are faced with a more complex world, and we should behave differently in response to it. The morale of our forces would be boosted tremendously by the knowledge that we were prepared to look favourably on their forebears' claims. Many servicemen and women have older relativeswho could benefit from a service pension; it would be phase 2 of a Labour Government delivering for our armed forces.
	I acknowledge that there are arguments that might deflect attention away from the demands of this campaign. Perhaps the most significant is that this Labour Government introduced the pension credit, which has lifted many poor pensioners out of poverty. I bet that many of those to whom the pension credit has been paid are veterans, who because of the parsimony of earlier Governments may have worked for a generation in the forces with nothing to show for it in their later years. If the campaign succeeded, there is no doubt that the structure of the pension credit would mean that veterans who received a service pension on the one hand would lose pension credit on the other. However, I know which I would prefer—not a means-tested benefit that required much form filling, information gathering and perhaps even a loss of pride, but an as-of-right pension in recognition of service rendered.
	The argument has also been made that to accede to the demand would be to acknowledge the demands of others in the public sector in similar situations—a costly precedent indeed. However, it was only a few weeks ago that I first heard of the so-called covenant between members of the armed forces, society and the Government. From my time in the forces I do not recollect ever seeing, being told of or signing such a covenant, which apparently defines the relationship between those who pledge to die for their country, if need be, and their country.
	I remember walking into the RAF recruitment office in Hull in 1971. I signed a form and swore an oath in front of an officer that I would be willing to make the ultimate sacrifice. I have to admit that I never anticipated that that eventuality would come to pass. But when we are told that members of the armed forces are just like any other public sector work force, I seriously question that. Were all public sector workers asked to take an oath to say that they would lay down their lives in the course of duty? No, they were not. The armed forces were treated differently then and they should be treated differently now.
	Another excuse that has been thrown back in the faces of veterans in the course of the campaign is that they should have known all along that their terms and conditions did not allow for a pension when their service was less than 22 years. Indeed they did not. However, the terms and conditions were changed beneficially for many of those people by a Labour Government in 1975. Of course, when changes are introduced there is always a publicity campaign, but I suspect that one could easily wonder how effective the campaign was in the forces at that time. It has been alleged to me that many of the veterans who make up the group of people who were coming close to 22 years' service in 1974-75 were shunted out of the forces on all sorts of pretexts so that they would not qualify. They were encouraged to leave, while dissemination of information on personnel issues was not always efficient or accurate.
	I wonder how many men and women walked away with exemplary certificates of discharge, where the reason for discharge was "premature voluntary release" —after being pressurised to go. Those people may have been led to believe that their service would contribute towards a pension. I have in my possession a copy of a Royal Marines certificate of discharge, dated 6 June 1972, which tells the recipient that he has accumulated
	"five years and 218 days towards pension."
	That was on the piece of paper that the discharged serviceman left with. It is misleading and inaccurate, as far as it goes. He may not have thought any more of it until he came to collect his pension and found that there was nothing there to collect.
	I do not blame the Labour Government for the way in which they handled the matter in 1975. They acted in the better interests of working people, in the way they thought that they could afford to at the time. However, what I am saying now is that we have to revisit the issue, otherwise it will go away only when all the veterans that we are talking about are dead—and many have died already. Let us remember that we are still talking about veterans of the second world war, Korea, Suez, Palestine and many other conflicts around the world.
	What am I asking the Government to do? Revisiting the issue means that the Secretary of State for Defence should meet a representative delegation of those affected. It means the Government should say what they think some kind of recompense would cost. It means acknowledging that these veterans do have a grievance and it means that they will no longer, as they see it themselves, be forgotten heroes. At every Remembrance Sunday service we say,
	"They shall not grow old as we grow old"
	and, "We will remember them," and we do. Now, in the democracy—the wealthy democracy—that those people died for, let us also remember those who have grown old.
	I will conclude with the words of my constituent, Mr. Hutchinson:
	"It does seem somewhat unfair that servicemen such as myself do not receive any recognition of the years spent in defence of our country. Reading the Royal Navy's publication 'Navy News' I am given to understand that it is possible for a naval rating to receive a pension after serving as little as 18 months. This does appear a little unjust".
	I have to say that Mr. Hutchinson is a master of understatement. He says that it is somewhat unfair and a little unjust. It is that humble, almost apologetic, entreaty that underscores the strength of his case. I urge my right hon. Friend to heed this campaign and respond accordingly.

Adam Ingram: My hon. Friend the Member for Morley and Rothwell (Colin Challen) has done well to secure a debate on equal pension provision for service personnel, regardless of when they served in Her Majesty's armed forces. Although the subject of British armed forces pensions has a long history that stretches back to the time of Elizabeth I, it is better that I start nearer the present day.
	In the early 1970s, the Ministry of Defence introduced an armed forces pension scheme following the introduction of the military salary in 1970, which replaced the system of basic pay and allowances. The military salary meant that the MOD could link pensions to pay for the first time, and in April 1972, representative pay rates were introduced on which pensions for members of the armed forces pension scheme were based. That meant that under that scheme, members of the armed forces with the same rank and same number of years' reckonable service were awarded the same pension, regardless of their actual pay on leaving service. Those pension arrangements are actually made up of three separate schemes that were established under a range of prerogative and statutory powers. The current arrangements are found in the Naval and Marine Pay and Pensions (Non-Effective Benefits and Family Pensions) Order 2001, the Army Pensions Warrant 1977 and the Queen's regulations for the Royal Air Force. The enabling legislative powers are to be found respectively in the Naval and Marine Pay and Pensions Act 1865, the Pensions and Yeomanry Pay Act 1884 and the Air Force (Constitution) Act 1917.
	In the early 1970s, members of the schemes were awarded a pension only if they had completed at least 16 years' reckonable service as an officer, or 22 years' reckonable service in another rank. Engagements for shorter periods were on non-pensionable terms. However, gratuities were awarded to those who left without qualifying for a pension, but who had completed nine years' reckonable service as an officer, or 12 years' reckonable service in another rank. The definition of reckonable service is all paid service after the age of 21 for officers, or after the age of 18 for other ranks.
	Before the introduction of the Social SecurityAct 1973, there were no rights to preserved pensions in any public or private pension schemes. Most schemes had very restricted qualifying criteria for the award of pensions. For instance, to qualify for a pension under the civil service arrangements, an individual had to be over 50 and to have served for 10 or more years. Individuals who left voluntarily before meeting both these criteria lost their rights to pensions. The 1973 Act brought about changes by requiring all pension schemes to preserve pension rights for those who left service after 6 April 1975 and had completed at least five years' qualifying service and attained the age of 26. Subsequent Social Security Acts reduced the qualifying period from five years to two years and removed the age qualification requirement. The armed forces pension scheme incorporated those changes from the operative date of 6 April 1975. It is for that reason, and to differentiate that scheme from the new pension scheme introduced in 2005, that we now call the scheme AFPS 75.
	As my hon. Friend said, those changes were not retrospective. It is a legal principle that individuals receive benefits in accordance with the scheme rules that were in place at the time of their retirement. It is a principle of public service pensions policy, and one that has been upheld by successive Governments, that improvements to pension schemes are not made retrospective. If the changes were made retrospective, it would add significantly to the cost to the taxpayer, not least because the issue is common to other public service schemes, not just that for the armed forces.
	My hon. Friend asks me to differentiate between members of the armed forces and others who serve as public servants, such as teachers and members of the emergency services, but that would be a legally untenable position. He also asked me to estimate the costs involved. We have not made a specific estimate of the cost of backdating armed forces preserved pensions to prior to 1975, and my hon. Friend alluded to some of the difficulties that would prevent us from achieving that.
	We have made a general examination, and the numbers affected are very large, so the costs, whether for the armed forces or more widely, would be considerable and would run into billions of pounds. I fully recognise that a number of individuals who have no occupational pension rights for their time in the armed forces—
	 It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	 Motion made, and Question proposed, That this House do now adjourn. —[Mr. Alan Campbell.]

Adam Ingram: I recognise that a number of individuals who have no occupational pension rights for their time in the armed forces are aggrieved that improvements to pension provisions since the mid-1970s were not applied retrospectively, but that does not mean that the work and commitment of those who served in the armed forces before 1975 is not valued. We value their contribution in many other ways, but I have set out the context in which judgments have to be made. I urge my hon. Friend to accept that his campaign would not apply to the armed forces alone, and it would have to apply to all public sector schemes. The costs for the armed forces would be prohibitive, and the wider costs, too, would be of considerable magnitude and would be simply unaffordable.
	Successive Governments have taken the same view. There is no realistic prospect that this or any other Government could afford the many billions of pounds that would need to be found to address the issue. That is an easy statement to make, but the real test is the legal one. The issue has been legally tested, and a claim for pre-1975 pension entitlement for the armed forces failed in the High Court in 2003, in the House of Lords in 2004, and in the European Court of Human Rights in 2006. There are other legacy issues, in addition to the pre-1975 pension entitlement that arose from Government economic policies and other improvements to AFPS 75, which did not cover those who served before the changes were made. Issues such as pension troughs, widows' and widowers' pensions for life, widows' post-retirement entitlement, and widows' third-rate and half-rate pensions are not unique to the armed forces, as there is a read-across to other public sector schemes. As I have said, making retrospective changes to pension schemes would have financial implications across the wider public sector.
	My hon. Friend said that we are proposing to spend money on nuclear defence, and I accept that that is the case. He urged us not to spend that money and to give it to the pensioners instead. Everyone wants a say in how that money is spent but, interestingly, when the public considered the matter, it wanted to retain the country's nuclear defences. They will have another opportunity to consider the issue as the debate develops in the coming weeks before we make a decision. It is easy for my hon. Friend to make that equation, but he would have to queue up with everyone else who is campaigning for us not to go down that road and who has their own ideas about how that money should be disbursed. He should take into account, too, the public mood on that specific aspect of our national defence. I suspect, however, that we will find ourselves on different sides of the debate.
	Since the 1970s there have been a number of improvements to pension provisions. For example, since the mid-1980s, individuals have had to serve for only two years to be entitled to preserved pension benefits and, from 1978, widows' pension provisions were extended to widowers. AFPS 75 incorporated those improvements to the spirit and letter of the legislation that required their introduction. The Government recognise the importance of proper pension provision for the armed forces. Since 2000, attributable death benefits for widows and widowers have continued on remarriage. Since March 2003, pension benefits have been made available to eligible unmarried partners for service deaths related to conflict. In September 2003, the concession was extended to cover deaths attributable to service. Since April 2005, death-in-service lump sums have risen to three or four times pensionable salary, depending on whether the member belonged to AFPS 75 or the newly introduced armed forces pension scheme 2005.
	The introduction of the new pension and compensation schemes in April 2005 was a considerable achievement, given that it came at a time when outside schemes were under pressure to move away from defined benefit arrangements. The scheme benefits compare favourably with other public service schemes and with schemes in the private sector. They reflect modern best practice and provide for a significant increase in family benefits. I am confident that our new schemes are designed to meet the needs of the armed forces in the 21st century.
	My hon. Friend said that he had a small interest to declare, but I know that it is not the prospect of financial gain that prompted him to raise the subject, and I fully recognise the kind offer that he made. We have to set the arguments that he advances against the major developments that the Government brought about to improve the pensions of those who serve in Her Majesty's armed forces. I appreciate the concerns that have been raised, but I set out to explain the reason for the current position and to put it in context. I fully recognise that my hon. Friend's early-day motion has attracted support. I just hope that those who signed it will read this debate, understand the logic of my argument, and reflect on their support for the early-day motion.
	My hon. Friend asked for a meeting between representatives from his campaign and the Secretary of State. As ever, that would be a matter for the Secretary of State, but I will certainly draw my right hon. Friend's attention to the request. I said at the beginning of my remarks that I would not refer back to the time of Queen Elizabeth I, and although I notice that we have a considerable amount of time left, I do not intend to fill it by talking about what happened in that period of history. We must consider the considerable progress made in the way in which we look after people. As my hon. Friend generally recognised, there was a change for the better in 1975. That decision goes back to 1973, although it was implemented in 1975, and it was delivered by the Governments of the time.
	The changes that my hon. Friend asks for would have an immense impact on public expenditure, and that is the why successive Governments did not revisit the decision; it was not from a lack of recognition of those who serve in Her Majesty's armed forces, or elsewhere in public services. I think that that is a solid argument, and I ask my hon. Friend to reflect on his campaign.
	 Question put and agreed to.
	 Adjourned accordingly at seven minutes pastSeven o'clock.